Export Credits Guarantee Department
	 — 
	Question

Lord James of Blackheath: To ask Her Majesty's Government what current financial exposure is faced by the Export Credits Guarantee Department (ECGD); and what plans they have for the ECGD.

Baroness Vadera: My Lords, as of 31 March, ECGD's total outstanding loans were £13.3 billion. ECGD aims to recover any money that it pays in claims and, over the past 20 years, has been cash-positive across its portfolio. As announced by the Secretary of State in New Industry, New Jobs, we are looking at existing and potential support offered by ECGD to ensure that the organisation plays a significant role supporting UK exporters through the recovery and beyond. ECGD is currently consulting on a letter of credit guarantee scheme and will launch a consultation on a credit insurance scheme for exporters by 19 June.

Lord James of Blackheath: My Lords, I thank the Minister for that response. However, will she please comment on the announcement in the Pre-Budget Report 2008 that a £1 billion allocation specifically to support small business finance would be channelled through the ECGD, and the later report in this April's Budget that consultations on the subject would start soon? Given the sheer importance of this £1 billion to small business finance, how has it taken eight months before even consultations can begin? Can she also please assure the House that there is absolutely no assumption that the £1 billion is any form of rescue or lending-ratio adjustment for the ECGD itself?

Baroness Vadera: My Lords, I am very happy to clarify that the £1 billion was then converted into £10 billion and was launched in January as the working capital scheme, which is now current; £5 billion of that is for trade credit insurance, which is now current and being implemented, and £1 billion is set against the lending agreements signed by RBS and the Lloyds group, which are also current. So that scheme is being launched. As part of that, in anticipation of potential market failure, there is a consultation on letters of credit.

Lord Razzall: My Lords, does the noble Baroness agree that the environmental groups are extremely concerned by proposals possibly to expand the ECGD's remit so that more taxpayer money supports more overseas deals such as the recent sale of 72 Eurofighters to Saudi Arabia? Will she undertake to ensure that projects that infringe UK human rights standards and the environment will not be supported?

Baroness Vadera: My Lords, I am very pleased to confirm that we would not support projects that do not meet environmental standards or are an abuse of human rights. On taxpayer funding, as I said in responding to the Question, ECGD has been self-financing over the past 20 years.

Lord Eden of Winton: My Lords, is it not the case that the fixed-rate export finance scheme has come to an end and that the new system to take its place was announced and came into existence in December last year? If that is the case, how is it that businessmen are not able to get any information or details about the new system? How can they possibly plan ahead unless they know what is going on?

Baroness Vadera: My Lords, the extension of the scheme to which the noble Lord refers—FREF—will be announced in the autumn, but I point out that there have been only four loans under the scheme in the last seven years. There is not a huge demand for it. There is currently only one serious inquiry and that company is well aware of the position.

Viscount Montgomery of Alamein: My Lords, when I was involved in promoting British projects overseas many years ago, especially in Latin America, we were always overtrumped and beaten to the punch by Coface and Hermes. Does the Minister have a view on whether that situation has improved?

Baroness Vadera: My Lords, we provide a level of support to British exporters that, as a percentage of our exports, is equivalent to that provided by Germany and the United States, but not to the level given by certain countries such as Canada. Following the privatisation of the short-term business in 1991, we have had a lower volume of business than certain other countries. However, I will not apologise for the more rigorous risk analysis, relative to some other countries, and the environmental and human rights concerns that are taken account of by ECGD.

Lord Roberts of Conwy: My Lords, will the noble Baroness explain how the banks got the money that she referred to? Was it for their own activities or the activities of their clients?

Baroness Vadera: My Lords, the working capital scheme assigned a guarantee with Lloyds and RBS, under which they are required to sign a lending agreement whereby they are required to lend to UK companies. We have a specific, legally binding agreement—one of the first of its kind in the world—which we monitor on a monthly basis to ensure that the capital that is released goes to UK industry.

Lord Tomlinson: My Lords, can my noble friend assist me? She referred to the £1 billion that became £10 billion in the new schemes. Is that part of the £10 billion package that the Government announced to deal with our economic crisis and which Her Majesty's Loyal Opposition opposed?

Baroness Vadera: My Lords, it is a little unclear sometimes what Her Majesty's Opposition do or do not support. I find it difficult to follow, because they appear not to have many detailed policies that we can discuss.

Lord Brooke of Sutton Mandeville: My Lords, given the Minister's first Answer to my noble friend and the answer that she has just given, does she appreciate the irony that, after 12 years of the Treasury working very hard to conceal bad news, it has developed the habit of concealing good news as well?

Baroness Vadera: My Lords, I am delighted that noble Lords have the good news now.

Lord De Mauley: My Lords, the ECGD's last annual report said that there was a need to reduce its cost base. How has the extra work announced recently affected any planned cost reductions?

Baroness Vadera: My Lords, my noble friend the Secretary of State has announced that a review will be taken in very short order. The review will look at the skills, calibre and resources that the ECGD will need. That will feed into the cost-cutting exercise.

Civil Service: Damian McBride
	 — 
	Question

Lord Lamont of Lerwick: To ask Her Majesty's Government why Damian McBride ceased to be a civil servant in 2005.

Lord Davies of Oldham: My Lords, Damian McBride was appointed as a special adviser in April 2005. He was employed under terms and conditions set out in the Model Contract and Code of Conduct for Special Advisers. Mr McBride relinquished his post as Head of Communications in Her Majesty's Treasury on taking up this appointment.

Lord Lamont of Lerwick: My Lords, I thank the Minister for that reply. Has he seen the report in the Guardian by Patrick Wintour on 16 April? It stated that Sir Gus O'Donnell, the then Permanent Secretary to the Treasury, insisted on the resignation of Mr McBride as a Treasury civil servant and press officer on the grounds, among others, that he had planted in newspapers false stories about Sir John Major and myself, quite wrongly alleging that we were blocking the release of information about the Conservative Government's economic policies—information requested under the Freedom of Information Act—and that at that point the then Chancellor, now the Prime Minister, decided to make Mr McBride a special adviser beyond the veto of Sir Gus O'Donnell. Is that report true or untrue?

Lord Davies of Oldham: My Lords, Damian McBride was appointed as a special adviser in 2005 following a distinguished and important role in the Treasury. As the noble Lord will appreciate, he held a very high and significant position in the Treasury. He was appointed as a special adviser under the terms of such an appointment. The press reports to which the noble Lord referred have to be taken on the basis of one's judgment of the paper concerned.

Lord Foulkes of Cumnock: My Lords, will my noble friend join me in congratulating the noble Lord, Lord Lamont, on his courage in raising this issue, which must bring back some painful memories of when he was forced to offer his resignation to John Major because of the collapse of the ERM after being advised by someone—his special adviser, a Mr David Cameron?

Lord Davies of Oldham: My Lords, as ever, I am grateful to my noble friend. However, the House will have seen that the original Question relates to events in 2005, reflecting then discussion about issues which obtained in 1992. We might think that we ought to deal with more contemporary issues.

Baroness O'Cathain: My Lords, will the Minister elucidate a bit further on this? If my noble friend's statement from the Guardian is correct, surely it should never have passed anybody's mind to re-employ Mr Damian McBride. Not only that, he did literally the most appalling things while he was in office, but he was allowed to resign. Why was he not sacked? Is the Prime Minister waiting for the opportunity to put somebody in his Government who will be able to turn to somebody like him and say, "You're fired"?

Lord Davies of Oldham: My Lords, it is true that Damian McBride resigned, but he obtained—and does obtain—no benefits, emoluments, compensation or any money at all. He left that day without a further penny of public money being spent on his employment. If the noble Baroness is suggesting that there is a significant distinction between being allowed to resign and being dismissed, I think that the House will disregard that.

Lord Newby: My Lords, does the Minister accept that, irrespective of whether Mr McBride is a special adviser or a civil servant, his activities are one of the reasons why trust in politicians and this Government is so low? What assurances can the Minister give us that the McBride mentality has been stamped out by Downing Street?

Lord Davies of Oldham: My Lords, as I just indicated, Damian McBride left immediately because of the fault that had been identified in what he had done. All special advisers are aware of that and have been informed by the Prime Minister of an added specification to their code of conduct which reinforces the fact that, although special advisers have a particular role in relating matters of government to the public, they are bound by a clear code of conduct, and infringements of that code will produce condign effects on them.

Baroness Noakes: My Lords, the Minister described Mr McBride as having a distinguished and important role at the Treasury, but this contradicts the reports that my noble friend Lord Lamont outlined; that Mr McBride was implicit in briefing against Sir John Major while he was a civil servant and, because of that, Sir Gus O'Donnell required him to stand down from the Civil Service. The Minister did not deny that when he responded to my noble friend; I now give him the opportunity categorically to do so.

Lord Davies of Oldham: My Lords, when I refer to Mr McBride's role, I refer to obvious facts from his curriculum vitae. He was head of indirect taxation from 1999 to 2002. He was head of VAT strategy in 2003. He was head of communications and strategy from September 2003 until he took up the special adviser's role. That was a significant career in the Treasury. The Opposition are contending that, during part of that time, Damian McBride may have committed some infringement in his actions in relation to the public. It is clear that, as soon as the offence was identified in 2009, the Prime Minister acted.

Lord Morgan: My Lords, is the answer to this question for the Government to disinter proposals in its Constitutional Reform Bill and create an independent Civil Service, which would be on a statutory basis and would not be tarnished by such appointments?

Lord Davies of Oldham: My Lords, I notice that there are also commendations to my noble friend from the other side of the House. My noble friend will be all too well aware that a very significant expansion in special advisers took place while the Opposition were in power. It is the case that we have increased the role of special advisers. We have also trebled the resources for Her Majesty's Opposition parties' ability to hold the Government to account. This reflects that government is more complicated and more demanding and, of course, that media requirements are more demanding. There is a necessity for some role beyond the Civil Service, which must be independent, as my noble friend has indicated. This will be reinforced in our constitutional proposals. I think all parties agree that there is a proper role for special advisers, who must, of course, be governed by a proper code of conduct.

House of Lords: Co-operation with European Parliament
	 — 
	Question

Lord Wallace of Saltaire: To ask the Chairman of Committees what steps are being taken to improve co-operation between the House of Lords and United Kingdom Members of the European Parliament in scrutinising the policy-making process of the European Union and the implementation of EU policies.

Lord Brabazon of Tara: My Lords, there is already substantial co-operation between this House and UK MEPs. For example, there are regular tripartite meetings between your Lordships' EU Committee, its Commons counterpart and UK MEPs. In addition, our own Brussels-based EU liaison officer is responsible for facilitating the exchange of information between the EU Committee and MEPs. Finally, the EU Committee regularly seeks evidence from UK MEPs.

Lord Wallace of Saltaire: My Lords, I thank the Chairman of Committees for that Answer. I welcome the establishment of an office in Brussels and the improvement of relations between British MEPs and this House. We share the common purpose of improving scrutiny of both national and European proposals as they go into and out of Brussels. I remember well that, after the last European election, the head of services of the British chair of a new European Parliament committee proposed that he should read two reports from our EU Committee before he started. We have the opportunity to make this a closer relationship. What further measures can we take to make sure that Members of the European Parliament are welcome to sit in on EU Committee meetings in this House; and that when we go to Brussels we, in turn, catch up with what they are doing?

Lord Brabazon of Tara: My Lords, as I said in my original Answer, there is high co-operation already. If noble Lords wish to propose any additional forms of co-operation, I undertake to pass them on to the Chairman of the European Union committee. Sadly, as your Lordships are aware, he is not here today; he is recovering from surgery and we hope to see him back before the end of the month.

Lord Howell of Guildford: My Lords, while we are on the subject of scrutinising EU policy-making activities, has by any chance the Chairman of Committees received any information on when the new Minister for Europe will take up her portfolio or when she might be entering this House?

Lord Brabazon of Tara: Sadly not, my Lords. I should make it very clear at the beginning of this Question that I am answering it on behalf of the administration of the House, and I shall not be able to answer any questions on events in the European Union elections last Thursday.

Lord Anderson of Swansea: My Lords, the continued development of the European security and defence policy argues the case for even closer co-operation, because the work straddles the responsibilities of this Parliament and of the European Parliament. Although there has been progress, the two Parliaments are in many ways almost on different planets. Can there not be a series of measures that include ensuring that, as a matter of course, the committees of this House send their work programmes and reports to the relevant British Members of the European Parliament, and vice versa?

Lord Brabazon of Tara: My Lords, the reports of our European Union Committee are already sent to all those in the European Parliament who are interested. That is one reason why we have a European Union liaison officer who is responsible in Brussels for dealing with exactly that kind of thing.

Lord Waddington: My Lords—

Lord Pearson of Rannoch: My Lords—

Lord Hunt of Kings Heath: My Lords, I think we should hear from the noble Lord, Lord Pearson, first.

Lord Pearson of Rannoch: My Lords, given that the EU Parliament only has the power of co-decision, while the monopoly for proposing all EU legislation remains with the Commission, and given that the Government have overridden the scrutiny reserve some 500 times in the past six years, and because, by the Government's own admission, Brussels pays no attention to the views of our Select Committees, would it not be more sensible to close down our EU committees and redistribute their excellent resources to other Select Committee work, which is of such value to the nation?

Lord Brabazon of Tara: My Lords, that is just the kind of question which I am not going to answer this afternoon.

Baroness Howarth of Breckland: My Lords, does the Chairman of Committees agree that the connections that have been made between the committees, particularly some of the sub-committees, and Members of the European Parliament have influenced the outcome of much of the legislation? I speak as the chair of Sub-Committee G, which has published a number of reports which have changed the proposed legislation.

Lord Brabazon of Tara: My Lords, that is very good news which proves the worth of the European Union Committee and of our contacts with MEPs.

Lord Waddington: My Lords, does the noble Lord not agree that the taxpayer would save a load of money, and it would be a very good thing, if we reverted to the old system of indirect elections to the European Parliament? We would have no need of new procedures, such as those mentioned by the noble Lord, Lord Wallace, and the MEPs would be among us here at Westminster. Surely the present set-up can be attractive only to those who look upon the Commission as a sort of government accountable to the people of Europe. It should be treated as a bureaucracy that serves the community's sovereign member states so that they can work more effectively together.

Lord Brabazon of Tara: My Lords, that is an interesting view. However, it goes somewhat wide of the Question on the Order Paper, which asks what co-operation this House has with our MEPs who were elected yesterday. We have to work with the system as it is, rather than with what the noble Lord may consider to be a better one.

Education: Creative Partnerships
	 — 
	Question

Baroness Bonham-Carter of Yarnbury: To ask Her Majesty's Government what contribution is made by the Department for Children, Schools and Families to the Creative Partnerships scheme.

Baroness Morgan of Drefelin: My Lords, the Department for Children, Schools and Families has provided financial support to the Creative Partnerships programme since 2003. The total funding from the department is £16.5 million. This financial year the department is contributing £2 million to the programme.

Baroness Bonham-Carter of Yarnbury: My Lords, I thank the noble Baroness for that Answer and congratulate the Government on the creation of the Creative Partnerships scheme which, through introducing artistic creativity in schools, goes so far to help turn round struggling schools. Why, however, when the House of Commons Education and Skills Committee recognises this as core education, does such a tiny fraction of the finance come from the DCSF?
	The DCMS, which shoulders the majority of the cost, has a budget which is 4 per cent of that of the DCSF. To put that into figures, that is £2 billion versus £54.4 billion. Why is the smallest department of state subsidising one of the largest?

Baroness Morgan of Drefelin: My Lords, I am grateful to the noble Baroness for her kind opening remarks but, with all due respect, it is in the name. It is the department for media and culture and that is why it makes such a significant contribution. I would reassure her, however, that the DCSF is very committed to promoting arts and culture and creative education in all our schools. That is why through our schools funding and our work with developing the primary curriculum and the new secondary curriculum, we are promoting creative skills development as an integral part of that new curriculum. I share, therefore, the commitment of the noble Baroness to promoting arts and creative education.

Baroness Shephard of Northwold: My Lords, the Minister has spoken of the responsibilities of the Department for Children, Schools and Families. In the light of the abolition of its sister department, the Department for Innovation, Universities and Skills, can she tell us what has happened to universities? Have they become the responsibility of the Department for Children, Schools and Families? If they have, has there been a ministerial Statement, which I certainly have missed? Have the universities been consulted and what is their view?

Baroness Morgan of Drefelin: My Lords, to reassure the noble Baroness, obviously where there are changes to the machinery of government, the Government ensure that a proper Statement is made as soon as possible and appropriate. Having come from the DIUS, I am aware of the important role that universities play in this country and, in view of the work that my right honourable friend David Lammy has been doing in promoting the highly successful higher education sector in this country, I am sure that will continue in the new setting.

Lord Howarth of Newport: My Lords, interesting and important though that was, perhaps I may to revert to the Question on the Order Paper. Is it not the case that with the Creative Partnerships scheme, the schools that commit themselves seriously to the arts see not only an enhancement of confidence and imaginative range on the part of many of their students but a lifting of academic attainment and morale right across the whole school, while the arts institutions that play their part are investing in the development of a new generation of audiences and arts practitioners for whom the arts will be important all their lives? That being so, what plans do the combined departments have to extend the benefits of this scheme to schools and institutions which have not so far had the opportunity to be involved?

Baroness Morgan of Drefelin: My Lords, in the Children's Plan that the DCSF launched shortly after its inception, following changes to the machinery of government with the creation of the first department focusing on children, we have made it clear that we wish to extend the offer of five hours of high quality cultural experience to all children throughout the country. Through 10 pathfinders, we have a considerable amount of work going on looking at how we can draw on the experience of Creative Partnerships to work in particularly deprived areas to make sure that all children have access during the curriculum and through extra-curricular activities to the kind of high quality cultural experience he is talking about.

Baroness Walmsley: My Lords, does the Minister agree that the programme ticks many of the Government's core education policy boxes and that it is therefore very worth while to subsidise it right across the country? For example, Ofsted said that it benefits academic performance, personal and social education, behaviour and attendance. Given the duty on schools to promote social cohesion, the multicultural nature of many of the activities ticks that box as well.

Baroness Morgan of Drefelin: My Lords, the noble Baroness highlights very important work by Ofsted. An independent survey looking at the role and work of Creative Partnerships has found that, as a result of that work, 91 per cent of head teachers have seen improvements in pupils' communication skills, 87 per cent have seen improvements in their motivation and 70 per cent have seen an improvement in their behaviour. So the noble Baroness is right: it is extremely important that we continue to invest in work such as that of Creative Partnerships, an independent organisation which is also promoting the Find Your Talent scheme and the 10 pathfinders. However, when you think about promoting a culture of austerity in government, I am curious to know—and I should be very interested to hear more from the opposition parties—how that kind of approach would work with the high-quality investment that we are making in the arts and cultural education. I am troubled by how that would work.

Lord Elton: My Lords, the noble Baroness answered my noble friend Lady Shephard at some length but, having listened carefully to my noble friend's question, I understand that she wanted to know which government department is responsible for universities. I understand that there is doubt about that outside this House as well. Can she very kindly tell us which department is now responsible for universities?

Baroness Morgan of Drefelin: My Lords, I am informed that there will be a Statement on machinery of government changes this afternoon.

The Lord Bishop of Liverpool: My Lords, can the Minister explain what provision there is for young offenders within the Creative Partnerships scheme?

Baroness Morgan of Drefelin: My Lords, as the right reverend Prelate will be aware, Creative Partnerships was set up as part of the Arts Council, which I believe works extensively with young offenders. I will have to get back to the right reverend Prelate about the detail of how Creative Partnerships connects, and I will make sure that I put a note in the Library as well.

Arrangement of Business
	 — 
	Announcement

Lord Bassam of Brighton: My Lords, with the leave of the House, my noble friend Lord Bach will repeat the Statement on the Sonnex case immediately after the Third Reading of the Marine and Coastal Access Bill.

Bank of England (Amendment) Bill [HL]
	 — 
	Order of Commitment Discharged

Moved By Lord Saatchi
	That the order of commitment be discharged.

Lord Saatchi: My Lords, as no amendments to this Bill have been tabled and no noble Lord has indicated a wish to move a manuscript amendment, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
	Motion agreed.

Marine and Coastal Access Bill [HL]

Bill Main Page
	Copy of Bill
	Explanatory Notes
	Amendments

Third Reading

Baroness Royall of Blaisdon: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Marine and Coastal Access Bill, have consented to place their prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
	Amendment 1
	 Moved by

Lord Hunt of Kings Heath: 1: Before Clause 23, insert the following new Clause—
	"MMO's role in relation to applications for development consent
	(1) The Planning Act 2008 (c. 29) is amended as set out in subsections (2) to (6).
	(2) In section 42 (duty to consult about proposed applications for orders granting development consent)—
	(a) the existing provision is renumbered as subsection (1);
	(b) in that subsection, after paragraph (a) insert—
	"(aa) the Marine Management Organisation, in any case where the proposed development would affect, or would be likely to affect, any of the areas specified in subsection (2),";
	(c) after subsection (1) insert—
	"(2) The areas are—
	(a) waters in or adjacent to England up to the seaward limits of the territorial sea;
	(b) an exclusive economic zone, except any part of an exclusive economic zone in relation to which the Scottish Ministers have functions;
	(c) a Renewable Energy Zone, except any part of a Renewable Energy Zone in relation to which the Scottish Ministers have functions;
	(d) an area designated under section 1(7) of the Continental Shelf Act 1964, except any part of that area which is within a part of an exclusive economic zone or Renewable Energy Zone in relation to which the Scottish Ministers have functions."
	(3) In consequence of the amendments made by subsection (2) of this section—
	(a) the heading to section 43 becomes "Local authorities for purposes of section 42(1)(b)", and
	(b) the heading to section 44 becomes "Categories for purposes of section 42(1)(d)".
	(4) In section 55 (acceptance of applications), in subsection (5), in the definition of "local authority consultee"—
	(a) for "section 42(b)" substitute "section 42(1)(b)";
	(b) for "section 42(c)" substitute "section 42(1)(c)".
	(5) In section 56 (duty to notify persons of accepted applications)—
	(a) in subsection (2), after paragraph (a) insert—
	"(aa) the Marine Management Organisation, in any case where the development for which the application seeks development consent would involve the carrying on of any activity in one or more of the areas specified in subsection (2A),";
	(b) after subsection (2) insert—
	"(2A) The areas are—
	(a) waters in or adjacent to England up to the seaward limits of the territorial sea;
	(b) an exclusive economic zone, except any part of an exclusive economic zone in relation to which the Scottish Ministers have functions;
	(c) a Renewable Energy Zone, except any part of a Renewable Energy Zone in relation to which the Scottish Ministers have functions;
	(d) an area designated under section 1(7) of the Continental Shelf Act 1964, except any part of that area which is within a part of an exclusive economic zone or Renewable Energy Zone in relation to which the Scottish Ministers have functions."
	(6) In section 102 (definition of "interested party" etc)—
	(a) in subsection (1), after paragraph (b) insert—
	"(ba) the person is the Marine Management Organisation and the development for which the application seeks development consent would involve the carrying on of any activity in one or more of the areas specified in subsection (1A),";
	(b) after subsection (1) insert—
	"(1A) The areas are—
	(a) waters in or adjacent to England up to the seaward limits of the territorial sea;
	(b) an exclusive economic zone, except any part of an exclusive economic zone in relation to which the Scottish Ministers have functions;
	(c) a Renewable Energy Zone, except any part of a Renewable Energy Zone in relation to which the Scottish Ministers have functions;
	(d) an area designated under section 1(7) of the Continental Shelf Act 1964, except any part of that area which is within a part of an exclusive economic zone or Renewable Energy Zone in relation to which the Scottish Ministers have functions."
	(7) The Secretary of State must give guidance to the MMO as to the kind of representations which may be made by the MMO under—
	(a) Chapter 2 of Part 5 of the Planning Act 2008 (c. 29) (pre-application procedure), or
	(b) Part 6 of that Act (deciding applications for orders granting development consent)."

Lord Hunt of Kings Heath: My Lords, I shall speak also to Amendment 22. A number of amendments were tabled on Report with the aim of ensuring that the Marine Management Organisation's role in relation to applications to the Infrastructure Planning Commission is enshrined in primary legislation, rather than secondary legislation as the Government had intended.
	Noble Lords will recall that at the end of debate on Report I undertook, given the importance of the arguments made, to take the matter away to see whether we could come up with alternative amendments that would appropriately reflect the MMO's important role in making representations to the IPC. The amendments that we have brought forward today are designed to reflect the MMO's role at three stages in the Planning Act process: first, the pre-application stage when a developer is considering putting in an application for development consent to the IPC; secondly, notification that an application has been accepted by the IPC for examination; and lastly, the examination process itself. Since it is important that the MMO, as a key player in the marine regulatory environment, is made aware of all proposals which could impact on the marine area, we are amending Section 42 of the Planning Act so that developers must consult the MMO on any proposed development that would or would be likely to affect the marine area. The MMO will therefore be made aware of, and have the opportunity to input and comment on, such proposals at an early stage. Secondly, we are amending Section 56 of the Planning Act to ensure that the MMO is formally notified of any accepted applications in the marine area. Thirdly, we are amending Section 102 of the Planning Act to make the MMO an interested party where the IPC has accepted an application in the marine area.
	The amendment to Section 102 ensures that the MMO is involved throughout the examination of those applications and that therefore it will have a key role in advising on any necessary marine licences which the IPC will deem as part of any consent issues. A consequential minor amendment is made in my Amendment 22 to Schedule 8 so that the descriptions of the various marine areas we are inserting into the Planning Act are consistent with the existing language in that Act. In addition, the new clause we are inserting into Chapter 4 of Part 1 requires the Secretary of State to give guidance to the MMO on the kinds of representations it may make under Parts 5 and 6 of the Planning Act.
	Given that both the IPC and the MMO will be newly established bodies which must work closely together on marine related developments in order to carry out their respective roles, we consider it appropriate to place a duty on the Secretary of State to issue guidance to the MMO on its role in relation to development projects subject to IPC consent. This guidance will clarify how the MMO will need to use its marine expertise; for example, to inform licence conditions, make representations on the marine parts of coastal projects, and ensure that proper enforcement can take place. This is in addition to the general guidance which the Secretary of State can give to the MMO under Clause 37, such as on enforcement and planning.
	In our debates since Committee and on the Planning Bill there has been considerable interest in the respective roles of the MMO and the IPC. All noble Lords have a desire to ensure that the two bodies should work together and be seen to do so. We are confident that these amendments are an appropriate reflection of the key role the MMO will have as a centre of marine expertise and the enforcement body for the majority of marine consents in advising both developers and the IPC on major infrastructure projects in the marine area. I beg to move.

Earl Cathcart: My Lords, I should declare my interests. I have been a local councillor for at least 10 years and I am a member of the Game Conservancy Trust, the Countryside Alliance, BASC, and other organisations that I cannot remember as I have only just recalled that I had to declare my interests now, but I can assure the House that they have not changed since last I gave them.
	I thank the Minister for tabling these amendments, which are a result of meetings we had following the discussion on Report of the MMO's formal role in decisions about large infrastructure projects at sea. I also pay tribute to my noble friend Lord Taylor of Holbeach, who, with great foresight, raised this issue during proceedings on the Planning Bill last year. These amendments ensure that, as we hoped then, the MMO has a statutory role in the decision-making process. We are therefore pleased finally to welcome them.
	However, we and noble Lords from all sides of this House have eagerly awaited the establishment of the MMO for a long time now. At Second Reading last year, we welcomed the Bill as the vehicle for delivering a champion of the sea. Unfortunately, as debates progressed, it became clear that our idea of a champion was rather different from that of the Government. The list of responsibilities that the Government intended to carve out from the MMO and either keep under direct government control or leave with alternative organisations grew to include some six or seven major areas. DECC keeps control over all the land gas installations at sea and Natural England sets up marine conservation zones, to name but two. I will not list them all, but the IPC keeping control over large energy installations was another example and the one we are discussing now.
	The amendments, therefore, do not go as far as we would have liked. We would prefer the MMO to have proper control over its waters. However, we appreciate that the Government will not shift their views on that and will accept the amendments as the best we can get for now.

Lord Greaves: My Lords, the noble Earl, Lord Cathcart, made a few wide-ranging remarks there about the Marine Management Organisation and its role, with many of which we have great sympathy, but at Third Reading we are dealing with the specific amendment tabled by the noble Lord, Lord Hunt of Kings Heath. As this is a House of Lords Bill, I have no doubt that there will be plenty of opportunity in the House of Commons further to discuss the role of the MMO, but it has been strengthened and clarified as the Bill has gone through this House not just by some of the amendments tabled but in what has been said about it and the commitments that have been given. It is clear that the Marine Management Organisation will be a major organisation in its own right with a great deal of influence, so we have made some progress, but there is opportunity for more progress in the House of Commons.
	I welcome the amendment. It may not have gone as far as we would have liked, but it accurately and genuinely reflects the commitment that the Government made on Report. In particular, it sets out fairly clearly the role that the Marine Management Organisation will have when applications for development consent are made to the Infrastructure Planning Commission. That is the minimum that we wanted in the Bill: to give the MMO that very clear role. That is there. When you are dealing with national quango-type organisations such as this, how much influence one has and how much another has depends to a large extent on the people running the organisations and the credibility and influence that they carve out for themselves. There is a lot to play for but, nevertheless, the amendment is welcome. I think that my noble friend Lady Hamwee has one or two other questions to ask, but, for the moment, we welcome the amendment and support it.

Baroness Hamwee: My Lords, I have one question and two declarations of interest—as vice-president of the Town and Country Planning Association and joint president of London Councils. I apologise if, when I was distracted as the Minister was introducing his amendment, I missed the point, but will he remind the House whether the Marine Management Organisation will be a statutory consultee, as it were, through regulations under Section 7 of the Planning Act in connection with national policy statements? I think that he dealt with development rather than with the overarching national policy statements, which are of course separate from the marine policy statements under the Bill.

Lord Hunt of Kings Heath: My Lords, first, I warmly welcome the support of the noble Lord, Lord Greaves, for this government amendment. I welcome him back to his place. We missed him very much in the concluding stages on Report and it is good to see him looking so well.
	I know that the noble Earl, Lord Cathcart, and his noble friend have been concerned about the issue of the relationship between the MMO and the IPC and would prefer the MMO to be responsible for all consents in the offshore regime. We have disagreed on this matter. We believe that, for nationally significant infrastructure projects, it is right that the IPC should be responsible, but I hope that this amendment will provide some comfort to the noble Lords. Since it is likely that most offshore consents will still fall to the MMO, because they will lie below the threshold of 100 megawatts and less, the MMO will develop considerable expertise in this area. It is also worth pointing out that the MMO will then be responsible, even when the IPC has consented, for ensuring that conditions are met. The MMO can also, under certain circumstances, issue additional requirements. There should be no doubt that the MMO, in relation to the consent regime, will have a major role to play.
	We have also debated the general role of the MMO, and the noble Earl, Lord Cathcart, expressed concerns that the MMO was not going to be the champion of the sea, which was required. However, I think that the MMO is going to play a very substantive role. We have also made the role of the MMO much clearer, thanks to the debates in Committee, and we welcome the changes made at the beginning of the Bill in relation to that. I am confident that the MMO will have a very significant role to play and I am confident that this amendment will help it. The answer is no to the specific question that the noble Baroness, Lady Hamwee, raised. Other than that, I welcome the support given for the amendment.
	Amendment 1 agreed.
	Clause 67: Notice of applications
	Amendment 2
	 Moved by Lord Davies of Oldham
	2: Clause 67, page 44, line 10, at end insert—
	"(2A) If the activity in respect of which the application is being made is proposed to be carried on wholly or partly within the area of a local authority in England, Wales or Northern Ireland, the appropriate licensing authority must give notice of the application, or require the applicant to give notice of the application, to that local authority (whether or not notice has been published under subsection (1))."

Lord Davies of Oldham: My Lords, I shall move Amendment 2 and speak to the other amendments in this group, particularly Amendments 2 to 9. There was extensive discussion in Committee and on Report on the people and bodies likely to be interested in a marine licence application and the way in which they should be made aware of, or consulted on, these applications. The noble Lord, Lord Greaves, and the noble Baroness, Lady Hamwee, voiced the feeling that licensing authorities should have a duty to make local authorities aware of the marine licence applications that they would be likely to have an interest in. My noble friend Lord Hunt of Kings Heath gave assurances during those debates that relevant local authorities would always, as a matter of course, be made aware of such applications by a licensing authority. It is very much the standard practice now, as far as the Marine and Fisheries Agency activities are concerned.
	However, we agreed to reflect on the discussions which we had in the preceding stages of the Bill and to look again at the provision before we reached this point. Amendments 2 to 9 are a reflection of our further consideration. They provide that, where the activity is carried on wholly or partly in the area of a local authority, the licensing authority must give, or require the applicant to give, notice of the application to that local authority. This new requirement is in addition to the general requirement to publish notice to any interested persons, and I hope that it will be seen as meeting the anxieties that were expressed when we debated this at earlier stages.
	The amendments will have the effect that the requirement to give notice to the local authority applies even if notice has been published more widely under subsection (1). As with the existing requirement to publish, the licensing authority may either give notice to the local authority itself or require the applicant to do so. In practice, the licensing authority may decide to require the applicant to publish notice under subsection (1) but choose to give notice to the local authority itself. Alternatively, there might be circumstances in which the licensing authority would want notice to be given to the local authority in question even when notice of the application was not to publish more widely. One example of this might arise in licensing a burial to be conducted at sea. We believe that the amendments as drafted properly account for the democratic responsibility which elected local authorities have for their areas while maintaining an efficient and flexible method of bringing applications to the attention of all bodies likely to be interested in an application.
	However, the amendment does not reveal the full story of the close relationship that we intend the Marine Management Organisation to build with local authorities in coastal areas and which will be of the greatest importance to the delivery of much of the content of this Bill. We have heard adequate testimony both in Committee and on Report that there is a wealth of experience, expertise and local knowledge in coastal local authorities which the MMO will necessarily draw upon. In particular, local authorities will have a fundamental part to play in the development of marine plans in coastal areas, particularly in recognition of their continuing responsibility for granting development consents in the area between mean high water spring and low water mark. Their role in preparing shoreline and estuary management plans as well as being representatives of the local community on the development of marine plans from the earliest possible stage to help interpret terrestrial plans will be of very great importance. They will assist integration at the coast and enable local interests to be fully reflected in marine plans. All this is key to the success of the implementation of marine planning as we envisage.
	To this end, we are working with the Local Government Association's special interest group on coastal issues to ensure that the processes we put in place enable this important level of involvement and participation for the MMO to work with local authorities. I hope that the House will feel that government Amendments 2 to 9 respond to the anxieties which have been expressed during the passage of the Bill.
	Amendment 10 relates to factors which licensing authorities must have regard to when making activities exempt from the need for a marine licence using the exemptions order-making powers under Clause 73. We had constructive discussions on this issue on Report, and there was general agreement that the power to make activities generally or conditionally exempt from the marine licensing regime should not undermine the purposes of the licensing regime itself; that is, to protect the environment and human health, and to prevent interference with legitimate uses of the sea while taking into account any other factors and authority it thinks relevant.
	In the light of the Government's policy to this effect and in the wake of the clear agreement expressed across the House during our discussions on Report, we have tabled this amendment. It mirrors the wording used in Clause 68 and makes it a requirement in the Bill that all licensing authorities must have regard to these factors when deciding to make an order exempting activities from the need for a marine licence. I beg to move.

Lord Taylor of Holbeach: My Lords, I declare an interest as a farmer, grower and landowner, a member of the NFU and of various conservation bodies. Before I respond to the Minister's introduction of the amendments, I join him in welcoming back the noble Lord, Lord Greaves, who is in his place today. We missed him in our debates on the last two days of Report stage.
	I thank the Minister for tabling this important group of amendments. They reflect our debates in Committee and on Report about the useful role that local authorities could play in support of the objectives of the Bill. I am grateful to him for listening to our concerns.

Baroness Hamwee: My Lords, I feel I ought to welcome my noble friend Lord Greaves as well. I missed him, too.
	I thank the noble Lord, Lord Hunt, for sparing time last week to meet the LGA special interest group. As is so often the case, there was a large array of officials there, which was very helpful. We had plotted that I would use the amendment to ask the Government to give a wider statement on how they viewed the role of local authorities, but the noble Lord, Lord Davies, has rather pre-empted that. However, I invite him to say anything more that he feels needs to be said.
	Last week we discussed Clause 16, which deals with the bodies to which the MMO can delegate functions. I was taken aback by the technical reason bowled straight at us at the meeting as to why the MMO, which has delegated functions from the Secretary of State, cannot itself delegate onwards. I understand the principle, but I had not realised that the MMO and the Secretary of State were in that relationship. If the Minister can explain that on the record more coherently than I can, it will help those who refer to Hansard. I have already had an e-mail from someone who was at the meeting saying, "Could someone confirm what actually happened at the meeting because I feel pretty baffled by it".
	Local authorities have expressed the feeling—and I agree with them—that they have an important role to play at the table, as they put it, with the MMO. The noble Lord, Lord Hunt, in particular, had some very useful ideas as to how the importance of the involvement of local authorities can be recorded, as no one seems able to find a way of doing so in the legislation other than in the licensing part. One idea was that the Explanatory Notes, when the Bill becomes an Act, should deal with the issue and perhaps give examples of local authority good practice.
	I thank the Minister and his officials for their explanations and the time that they have given. I wait with interest to learn what more can be done to confirm that essential role.

Baroness Byford: My Lords, if I fail to welcome back the noble Lord, Lord Greaves, he might take it in the wrong manner. I welcome his return to the Bill. He has put a lot of work into it, and we welcome him back.
	I shall make one comment and ask one question. I particularly welcome Amendment 10; it is good to have it written into the Bill. We discussed it at great length earlier and it is quite right that we should have it. My question relates to "any local authority". It may well be that I have slightly misunderstood, but does "local authority" include at parish council level, or does it refer only to tiers above parish council level? Clearly, if parishes are not included, it would seem sensible that they were. I remind the House of my interests, which are on the Register.

Lord Greaves: My Lords, I am very grateful for everybody's kind words. When I attended last night's counting of the European ballot papers in Pendle, a representative from the Conservative Party came up to me and shook my hand, saying, "I'm very glad to meet you, Lord Greaves. I have been hearing good things about you". I said, "Oh—where does that come from"? "From Lord Taylor", he said.

Noble Lords: Oh!

Lord Greaves: Being praised by Conservatives, my Lords, is a bit like being approached by Greeks bearing gifts. Nevertheless, I am grateful and thank your Lordships very much, but I was following your proceedings closely from over 200 miles away. When I last spoke, I was so keen to get involved again that I forgot to declare my interests which are, as I have declared previously, mainly my membership of recreational and conservation organisations, particularly my involvement with the British Mountaineering Council and the Open Spaces Society.
	On this amendment, all I want to do is thank the Government for tabling it. Again, it is line with their commitments on Report. It effectively puts into the Bill—in their own words—what our amendments tabled on Report said on the position of local authorities and their rights as statutory consultees in relation to licensing matters. We are grateful that the Government have recognised the special position that democratically elected local authorities hold, as opposed to all the other organisations that will be consulted or may appear in secondary legislation. Again, I thank the Government.

Lord Davies of Oldham: My Lords, I am grateful to the noble Lord, Lord Taylor, for welcoming the amendments, although he presumes too much. I am, of course, pleased that the noble Lord, Lord Greaves, is restored in health, but it goes much too far to say that I welcome him back while deliberating on this Bill. It is all right for the noble Lord, Lord Taylor; the noble Lord, Lord Greaves, has caused him marginal trouble. I assure him that that has not been the case as far as the Government are concerned, so I cannot fully associate myself with such remarks.

Lord Greaves: My Lords, while not wanting to cause any trouble at all, that is the greatest compliment I have had for a long time.

Lord Davies of Oldham: My Lords, we are in danger of forming an all-party alliance which, I guess, is only possible for a day or so after elections have been conducted and certainly not before. I do, of course, respect the contributions to the Bill by the noble Lord, Lord Greaves. On the role of local authorities, we were, as I indicated in my opening remarks, responding, as constructively as we are able, to points that the noble Lord and the noble Baroness, Lady Hamwee, had made in Committee and on Report.
	On the particular points that were raised, on the question from the noble Baroness, Lady Byford, the tiers above parish councils are defined in Amendment 9. The noble Baroness will appreciate that we are talking about local authorities, but I understand her point about parish councils, and no local authority will be able to meet its requirements regarding these developments without respecting the position of the coastal parishes within its framework that may be affected. Our points about the more formal issues of consultation are directed to local authorities, although the noble Baroness accepts that we are concerned that notice is given to all who might have an interest. In some cases, one can anticipate a particular parish council having possibly the most specific and even among the most important of interests. We would not expect anything other than them being involved in the exercise in those terms.
	On the issues raised by the noble Baroness, Lady Hamwee, Clause 16 allows further delegation of only the functions that are delegated to the MMO in the Bill. That does not include planning and licensing, which are functions that the devolved authorities and the Secretary of State have. The MMO cannot devolve the responsibilities of the Secretary of State or the devolved authorities; they cannot be devolved further. In all other areas, though, it is expected that the MMO will be able to delegate extensively. I hope that she will accept that on the basis on which it is intended.
	She invited me to dwell further on the issue of the contribution and role of the local authorities. With the noble Lord, Lord Greaves, back in his place, does anyone think I am going to dare to dwell on those matters? We have had intensive discussion about these issues. I know that the noble Baroness could pester me from now until a long time in the future about the crucial position that the local authorities occupy with regard to this legislation. I am not denying that; but I am shying away at this late stage from reopening the debate on how we could more effectively describe the role of local authorities. This legislation sets out the framework within which to operate, and, after the discussions we have had in Committee and on Report, we now have a framework that safeguards the proper interests of the local authorities while ensuring that the principal operations of the MMO and others concerned with the implementation of the policy under the Bill are also safeguarded.
	Amendment 2 agreed.
	Amendments 3 to 9
	 Moved by Lord Hunt of Kings Heath
	3: Clause 67, page 44, line 11, after "The" insert "appropriate licensing"
	4: Clause 67, page 44, line 11, after "unless" insert "(a)"
	5: Clause 67, page 44, line 12, at end insert "(but see subsection (6)), and
	(b) notice has been given under subsection (2A) to any local authority to which notice of the application is required to be given by virtue of that subsection (but see subsection (7))."
	6: Clause 67, page 44, line 13, leave out subsection (4) and insert—
	"(4) If the appropriate licensing authority—
	(a) publishes notice of an application, in pursuance of subsection (1)(a), or
	(b) gives notice of an application to a local authority, in pursuance of subsection (2A),
	the licensing authority may require the applicant to pay a fee towards the reasonable expenses of doing so."
	7: Clause 67, page 44, line 20, leave out "This section" and insert "Subsection (1)"
	8: Clause 67, page 44, line 25, at end insert—
	"(7) Subsection (2A) does not apply in the case of any particular application and any particular local authority if—
	(a) the appropriate licensing authority considers that notice of the application should not be given to the local authority, or
	(b) the Secretary of State certifies that in the opinion of the Secretary of State it would be contrary to the interests of national security to give notice of the application to the local authority."
	9: Clause 67, page 44, line 25, at end insert—
	"( ) In this section "local authority" means—
	(a) in relation to England, a county council, a district council, a London borough council, the Common Council of the City of London or the Council of the Isles of Scilly;
	(b) in relation to Wales, a county council or a county borough council;
	(c) in relation to Northern Ireland, a district council."
	Amendments 3 to 9 agreed.
	Clause 73 : Exemptions specified by order
	Amendment 10
	 Moved by Lord Hunt of Kings Heath
	10: Clause 73, page 48, line 24, at end insert—
	"( ) In deciding whether to make an order under this section, the appropriate licensing authority must have regard to—
	(a) the need to protect the environment,
	(b) the need to protect human health,
	(c) the need to prevent interference with legitimate uses of the sea,
	and such other matters as the authority thinks relevant."
	Amendment 10 agreed.
	Clause 122 : Creation of network of conservation sites
	Amendment 11
	 Moved by Lord Hunt of Kings Heath
	11: Clause 122, page 80, line 9, leave out from beginning to "the" in line 10 and insert "When complying with the duty imposed by subsection (1),"

Lord Hunt of Kings Heath: My Lords, I shall speak also to a series of government amendments grouped with this one. Before I do, though, I return to the debate on the first group. When I said to the noble Baroness, Lady Hamwee, that the MMO will not be a statutory consultee under Section 7 of the Planning Act, that is the position at the moment. I am glad to report, though, that regulations will be made under this clause in due course when they will then be consulted on. That probably gives the noble Baroness a better answer than the first effort.
	We spent some time in Committee and on Report debating the Part 5 provisions and how they can be further strengthened. We have listened carefully, and I have been able to lay before your Lordships a number of amendments in response. The question of commitment to a network that is ecologically coherent has exercised your Lordships in a number of debates since Second Reading and Committee. We have explained why referencing the term "ecological coherence" in the Bill is not the most effective way to ensure that a network is delivered. Without revisiting those arguments, I commend my Amendment 12, which responds directly to the concerns raised by noble Lords.
	The crux of the issue lies in the fact that noble Lords were concerned that a lot of trust was being put into non-statutory guidance on the selection of marine conservation zones. While the Bill sets out conditions that our network must meet, and the MPA strategy and guidance underpinning the selection of marine conservation zones sets out the principles of ecological coherence in more detail, there is concern that the Government are not being clear enough about the overall guiding principles for the selection of marine conservation zones to ensure that these sites, together with other types of marine protected areas, deliver an ecologically coherent network, based on our current understanding of that concept.
	For this reason, I have tabled a series of amendments which will require the appropriate authority—Scottish Ministers, Welsh Ministers and the Secretary of State—each to lay a statement before the relevant legislature. The statement is to set out the principles that each will follow in contributing to the UK network and may also set out any other matters that they consider might be relevant. The statement must be made within two months of the commencement date for the nature conservation provisions set out in this Bill and must be kept under review and updated in accordance with any future changes to the design principles.
	The Government would use this statement to set out their intention to use the principles of ecological coherence and to say what those principles are. The design principles are described on page 30 of the recently published draft strategy for marine protected areas. The amendments ensure that if any changes are made to the design principles driving the network, a revised statement must once again be laid before the appropriate legislature. I am confident that the amendments will allow scrutiny of the design principles for the network. Most importantly, they respect the evolving nature of the concept of ecological coherence. They will allow us to ensure that the design and designation of the network can reflect the latest scientific evidence and adapt with our understanding of ecological coherence.
	I pay tribute to the noble Lord, Lord Greenway, for his input on the issue of recreational vessels and, more specifically, for ensuring parity in the by-law restrictions placed on recreational and non-recreational vessels. I promised to consider this point on Report and now table Amendments 14, 15 and 16 to meet the concerns that were expressed then.
	The Government are firmly committed to ensuring that marine conservation zones are effectively protected. It is important, as the noble Earl, Lord Cathcart, said on Report, that MCZs can be defended from excessive recreational use if considered necessary. However, we do not want deliberately to preclude other vessels from similar restrictions if they could also cause damage. We have sought advice on the extent to which we can prohibit all vessels entering marine conservation zones. Having carefully considered the advice, we believe that the UN Convention on the Law of the Sea allows the Government, in certain circumstances, to restrict entry into or passage through marine conservation zones by all vessels and not just recreational ones.
	Amendment 14 to Clause 128 therefore removes "recreational" from subsection (3)(b), ensuring that, if the conservation objectives for a site require it, the MMO can make by-laws which restrict all vessels entering into or moving within marine conservation zones, provided it complies with the UN Convention on the Law of the Sea. As we have removed reference to "recreational vessel" in Part 5, I have consequently tabled Amendment 16 to Clause 146, which removes the definition of "recreational vessel".
	I am confident that these amendments address noble Lords' concerns and ensure that we are not placing disproportionate restrictions or burdens on recreational vessels. Instead, we have now ensured a system where we can focus on furthering the conservation objectives for a marine conservation zone and, where necessary, restrict all vessels entering sites.
	I have also tabled Amendment 15 to Clause 140. Following the points made by the noble Lord, Lord Greenway, in Committee, we have also looked again at this aspect of the UN Convention on the Law of the Sea. Our analysis of the text is that it is only once we have declared an exclusive economic zone that we can apply the general offence to vessels from third countries. The amendment therefore applies the general offence of deliberately or recklessly damaging a marine conservation zone to third-country vessels once the UK has declared an exclusive economic zone. Part 2 of the Bill gives us the power to declare such a zone.
	There are then a series of minor and technical amendments to Schedule 11. The effect of Amendments 23, 24, 25 and 26 isto adapt provisions on MMO by-laws and Welsh Minister orders for the protection of European marine sites so that they could apply more logically to such sites. These amendments do two things. First, they ensure that by-laws may be made for the protection of European sites, rather than for the furthering of conservation objectives which do not necessarily exist for these sites. Secondly, they more selectively apply the by-law provisions of Part 5 to the European sites. In particular, the power to make interim by-laws in Part 5 is not relevant in the European site context, and so is not needed.
	I hope noble Lords will think that these are helpful amendments, which very much respond to our debates on Report. I beg to move.

Lord Taylor of Holbeach: My Lords, I thank the Minister for bringing forward these amendments. The successful establishment of an effective conservation zone is one of the fundamental aims of this Bill and perhaps the most difficult to achieve. The designation of a network is similarly crucial to the effectiveness of the zones, but as debates have shown, there is still much uncertainty about the way this will be done. Indeed, as the Minister reminded us, we spent a considerable amount of time seeking to bring the concept of ecological coherence to the designation of MCZs.
	The amendments bring some much needed transparency and therefore some effective accountability to the whole designation process. Likewise, the later amendments also assist the process of by-laws on all vessels. We therefore welcome the amendments.

Lord Greenway: My Lords, I think my maritime interests are generally well known around the House, but they are on the record and they are non-pecuniary. I thank the noble Lord, Lord Hunt, for being as good as his word and agreeing to look again at the amendments I moved at an earlier stage which aimed to meet the concerns of the boating authorities that recreational vessels were being singled out above other types of vessel when it came to by-laws restricting their entry into marine conservation zones.
	As the Minister said, he and his team have looked again at UNCLOS and have come round to my way of thinking, and for that I am most grateful. In fact, the Government amendments achieve very much what I was seeking to achieve, and I am grateful for that.
	This could well be the last time I speak on this Bill. I must confess that when I was asked to chair the Joint Committee looking at the draft Bill last year, I never in a million years thought that I would still be discussing it more than a year later. I must express my gratitude to the noble Lords, Lord Hunt and Lord Davies of Oldham, for their unfailing courtesy and helpfulness during the many long hours that we have discussed the Bill. I can only commend their stamina and fortitude.

Lord Greaves: My Lords, I think we support that, and may say so in greater detail later as I do not think this is the last time I shall speak. On behalf of the Liberal Democrats, I welcome the amendments. They are in response to the concerns of the noble Lord, Lord Greenway, which we very much support. The legal advice that the Government have received is welcome indeed.
	The network of marine conservation zones was one of the major debating points as the Bill went through your Lordships' House. I have no doubt that it will also be one of the major debating points in the House of Commons, when it gets there. The amendments are a very welcome move towards the kind of strengthening that my noble friend Lady Miller of Chilthorne Domer was asking for. Again, as with the Marine Management Organisation, I do not think it is just the changes that have been made in the Bill. The explanations that have been given and the understanding of how it is intended to work have very greatly strengthened confidence that the system is going to work. We will see, but the debates that have taken place, the explanations that the Ministers have given and the briefings that have been provided have been extremely helpful.
	We can send this part of the Bill on its way, with greater confidence that marine conservation zones—and particularly a coherent network of marine conservation zones—will be put into place and will work. We have more confidence in that than we had when we started the Bill some six months ago. I welcome that. Thank you again.

Lord Eden of Winton: My Lords, I warmly support the words expressed by the noble Lord, Lord Greenway, in appreciation of the work of the Ministers in charge of the Bill. At the same time, I should also like to extend congratulations to those who have laboured behind the scenes in doing some extremely skilful drafting work, some of it fairly rapid, in bringing the amendments forward in the way that they have done.
	I am gratefully encouraged by these amendments and by the words that the Minister used when he talked about the evolving nature of the concept of ecological coherence. It is important that the legislation should contain sufficient flexibility to allow improvements to be generated as further knowledge is gained from the experience of the establishment of the marine conservation zones.
	The Minister referred to one other thing that was not totally clear to me. He talked about guarding against "excessive recreational use". I wonder how that is to be assessed. It seems to me that the most important thing is to have a very alert monitoring system so that there is effective policing as life goes on, so that those who are responsible for adjudicating in these matters or for policing in the operation of the MCZs are ahead of the game and know when action is necessary, because in order to introduce the necessary action a certain amount of time will have to have passed.
	With those words about welcoming the amendments and my slight concern about the interpretation of excessive recreational use, I again thank the Ministers very much indeed for the wholly constructive way in which they brought this measure to the House.

Lord Hunt of Kings Heath: My Lords, I thank all noble Lords who have spoken for the generally warm welcome that they gave to this group of amendments. I am also very grateful for their generous comments about the officials working on the team. They very much appreciate those comments, which I of course endorse.
	The noble Lord, Lord Eden of Winton, spoke passionately on these matters, particularly in Committee. He still has one or two concerns but I think that we have gone as far as we can to reassure about our commitment to MCZs and to ecologically coherent networks. I think that he is right about flexibility. The construct of the Bill as it now stands allows flexibility for adjustments to be made as we gain more experience and as more scientific knowledge becomes available. I agree with him about monitoring, which is very important indeed, and it will be important that the regulatory authorities can respond quickly and effectively in the light of that monitoring. I absolutely endorse that. We will ensure that the spirit of that is conveyed to those who will have the very grave responsibility of taking these matters forward in future.
	Amendment 11 agreed.
	Amendments 12 and 13
	 Moved by Lord Hunt of Kings Heath
	12: Clause 122, page 80, line 12, at end insert—
	"(5A) Before the end of the period of 2 months beginning with the date on which this section comes into force, the appropriate authority must—
	(a) prepare a statement setting out such principles relating to the achievement of the objective in subsection (2) as the authority intends to follow when complying with the duty imposed by subsection (1), and
	(b) lay a copy of the statement before the appropriate legislature.
	(5B) A statement prepared by the appropriate authority under this section may also set out other matters relating to the achievement of that objective which the authority intends to take into account when complying with the duty imposed by subsection (1).
	(5C) The appropriate authority must—
	(a) keep under review any statement it has prepared under this section, and
	(b) if it considers it appropriate in consequence of a review, prepare a revised statement of the principles referred to in subsection (5A) and lay a copy of it before the appropriate legislature."
	13: Clause 122, page 80, line 13, at end insert—
	""the appropriate legislature" means—
	(a) in relation to the Secretary of State, Parliament;
	(b) in relation to the Welsh Ministers, the National Assembly for Wales;
	(c) in relation to the Scottish Ministers, the Scottish Parliament;"
	Amendments 12 and 13 agreed.
	Clause 128 : Byelaws for protection of MCZs in England
	Amendment 14
	 Moved by Lord Hunt of Kings Heath
	14: Clause 128, page 85, line 20, leave out "recreational"
	Amendment 14 agreed.
	Clause 140 : Exceptions to offences under section 138 or 139
	Amendment 15
	 Moved by Lord Hunt of Kings Heath
	15: Clause 140, page 93, line 19, at beginning insert "Until the coming into force of the first Order in Council made under section 40 (the exclusive economic zone),"
	Amendment 15 agreed.
	Clause 146 : Interpretation of this Chapter
	Amendment 16
	 Moved by Lord Hunt of Kings Heath
	16: Clause 146, page 96, leave out lines 27 to 29
	Amendment 16 agreed.
	Schedule 1 : The Marine Management Organisation
	Amendment 17
	 Moved by Lord Greaves
	17: Schedule 1, page 222, line 11, at end insert—
	"( ) An order under sub-paragraph (1) must not amend paragraph 3(1)(b) so that it provides that there may be fewer than 5 ordinary members."

Lord Greaves: My Lords, this comes back to a small but important issue—the size of the board of the Marine Management Organisation. It is identical in meaning to an amendment that I moved on Report. The only difference is that it uses words that Government draftsmen prefer rather than those that I had written. That seems to be perfectly reasonable.
	We had a long discussion in Committee about the size of the Marine Management Organisation. As set out, there will be at least five and not more than eight members, plus the chairman; so the total will be between six and nine, including the chairman. There was discussion about whether this was big enough, and what the right size was. The Government made clear their intention that the size will be eight plus the chairman, at least in the beginning. The amendment I moved on Report stated that the provision that the Secretary of State has in the Bill to change the range of five to eight, plus the chairman, should not be used to reduce the size below five, which would not be satisfactory. That is the point I put forward on Report and that is what I put forward again in the amendment. I thank the Government for their assistance in drafting the amendment. I beg to move.

Lord Davies of Oldham: My Lords, lest it be thought that I was a little churlish earlier when referring to the noble Lord, Lord Greaves, let me say how delighted I am to see him in his place, moving an amendment with which the Government agree completely.
	Amendment 17 agreed.
	Schedule 4 : Exclusive economic zone and Welsh zone: consequential amendments
	Amendment 18
	 Moved by Lord Hunt of Kings Heath
	18: Schedule 4, page 234, line 21, at end insert—
	"(1B) Subsection (1A) does not have effect in relation to an Order in Council to the extent that it contains provision made by virtue of paragraph 4 of Schedule 3 (functions exercisable beyond the territorial sea).""

Lord Hunt of Kings Heath: My Lords, Amendment 18 corrects an unforeseen anomaly that has arisen in connection with the transfer of functions in respect of the Welsh zone that will be created by Clause 42. The policy intent is that where a function in the area of the Welsh zone beyond the territorial sea is transferred to Welsh Ministers under Section 58 of the Government of Wales Act 2006, the transfer will be restricted to functions connected with fishing, fisheries and fish health. This is spelt out in the amendment to that section contained in paragraph 9(2) of Schedule 4.
	However, that provision could be read as contradicting the existing provision in paragraph 4 of Schedule 3 to the Act. This provision provides that the power in Section 58(1)(c) to direct that functions relating to Wales must be exercised after consultation with Welsh Ministers also applies in relation to certain specific environmental protection functions exercisable in relation to an area defined in the Act as "Welsh controlled waters". "Welsh controlled waters", like the "Welsh zone", include that part of the sea adjacent to Wales that is beyond the seaward limits of the territorial sea, and we want to ensure that our fisheries restriction is not read as contradicting this separate power. To rectify this, an additional subsection (1B) is being inserted into Section 58 of the Government of Wales Act. Let me reassure noble Lords that this amendment is purely minor and technical. I beg to move.

The Duke of Montrose: My Lords, this is a useful tidying up amendment, as the current text might have been interpreted as interfering with powers that might be available to the Welsh Government beyond the territorial sea.
	During the debate on amendments that the Government introduced on Report, we were quite involved with seeing that the Welsh Assembly Government were given adequate powers, in particular relating to the management of fisheries, some of which extend beyond the territorial sea. This takes us into the area of the different zones that have been determined as part of devolution under the Bill.
	I thank the Minister for a very useful and lengthy briefing that I have only just received on cross-border powers and arrangements. It was phrased in relation to the Solway Firth but must apply equally to the Bristol Channel and the northern boundary of the Welsh inshore area. The point is clearly made that because the MMO, which will be operating in the English sphere, is a "non-departmental public body", whereas Marine Scotland is an arm of the Executive of Scotland, and in Wales the Executive will also be taking charge, it is not appropriate for them to form a joint subordinate body. Perhaps the Minister can explain some of what that paper contains or make sure that its content is contained in a paper available to all those who have to work with these cross-border arrangements, as it goes into great detail of how it would all need to be worked out.
	The introduction of the Bill has given a great deal more significance to the meetings that take place under the Joint Ministerial Council. I think we are all glad that there was much agreement at that level as there could have been trouble otherwise, but it raises the question of what weight and authority we in Westminster need to give to the deliberations of this body, and whether the Joint Ministerial Council itself recognises that Westminster has overall control.

Lord Livsey of Talgarth: My Lords, I, too, welcome this amendment wholeheartedly. It is clear that some difficulties came to light in the debates that we had, particularly on cross-border issues. This appears to me to put the record straight. Indeed, the Government of Wales Act 2006 has been appropriately amended to take account of the developments in the Bill and I hope that this will satisfy the Welsh Assembly Government.

Lord Hunt of Kings Heath: My Lords, I thank the noble Lord, Lord Livsey, for commending the amendment, which I believe clarifies matters. I say to the noble Duke that I am happy to circulate the paper more widely. Clearly, there is a problem in relation to the desire to establish joint bodies and the conflict that thereby arises with the devolution settlement. However, we will do everything we can to ensure that the new arrangements work well together. I referred to the meeting of UK Ministers that took place in the autumn, which was very helpful in resolving some of the issues in relation to the Bill. That was a very positive sign.
	As regards the British-Irish Council, this matter also concerns the Government of Ireland. Therefore, one has to be cautious about where Westminster comes into play in that, but certainly I agree that it is important that the outcome of those deliberations is reported back. The noble Duke raises a substantive point. As I had the responsibility of chairing the meeting of environment Ministers, I shall be happy to reflect on communicating the outcome of those meetings.

The Duke of Montrose: My Lords, does the Joint Ministerial Council include Ministers from the Irish Republic? I had understood that UK bodies were involved.

Lord Hunt of Kings Heath: My Lords, I must distinguish between the meeting that took place last autumn between Ministers from the four UK Administrations, which specifically discussed this Bill and was helpful in allowing us to reach a very sensible outcome ensuring that there would be good co-operative relationships, and the British-Irish Council. I chaired a meeting of the latter body in Jersey a few weeks ago at which we discussed the marine environment and where we had many helpful discussions about co-operative approaches to tackling the marine environment. That meeting had the advantage of bringing in the Isle of Man, Jersey and Guernsey. As noble Lords will know, there is concern about that issue. Alas, the noble Lord, Lord Wallace, is not here to enliven our debates on these matters. I think that he described it as a great white area between Wales and Ireland in terms of regulation and enforcement. The outcome of the meeting last autumn was very encouraging, as is the determination that I see on the part of all Administrations, including the Irish Government, to ensure that we protect our marine environment. I take great comfort from that.

Lord Livsey of Talgarth: My Lords, I very much appreciate what the Minister has just said. It reflects the sensitivity with which he and his colleagues have treated the devolution settlement in Wales. The British-Irish Council is particularly important for resolving matters to do with the Irish Sea. Indeed, the Minister and his colleagues have moved this process forward to achieve a much deeper understanding and co-operation between all those concerned with the Irish Sea.
	Amendment 18 agreed.
	Schedule 6: Marine plans: preparation and adoption
	Amendment 19
	 Moved by Lord Davies of Oldham
	19: Schedule 6, page 239, line 21, leave out "regional planning body whose area" and insert "responsible regional authorities whose region"

Lord Davies of Oldham: My Lords, I shall speak also to government Amendments 20 and 21. The first two amendments ensure that the Bill works effectively with the Local Democracy, Economic Development and Construction Bill, presently undergoing scrutiny in the other place. Paragraph 1 of Schedule 6 to the Bill requires a marine plan authority to notify a number of "related planning authorities" when it begins to prepare a marine plan. One of these related planning authorities is a terrestrial authority responsible for planning at a regional level. Currently, that is the regional planning authority defined under Section 2 of the Planning and Compulsory Purchase Act 2004. The House will, of course, be aware of the proposals in the Local Democracy, Economic Development and Construction Bill to replace regional planning bodies with responsible regional authorities that comprise a local authority leaders' board and the regional development agency. We therefore need to update the reference in the Bill to ensure that it continues to operate effectively once the Local Democracy, Economic Development and Construction Bill completes its parliamentary passage and comes into force. I hope that the House will support these minor changes to paragraph 1.
	The final amendment in this group, Amendment 21, is in response to the promise we made on Report to consider an amendment tabled by the noble Baroness, Lady Hamwee. It required a marine plan authority to consider the extent to which matters raised in its representations have been resolved when deciding whether to appoint an independent investigator. At the time, her amendment was commended from the Dispatch Box because it reflected our intention that this should be one of the key factors in determining whether an independent investigation should be held. The Government have therefore tabled Amendment 21, which addresses this very point, although in slightly different terminology. It requires the marine plan authority to consider the extent to which any issues raised during the public consultation on the marine plan remain unresolved following the consultation and, therefore, should inform the decision to appoint an investigator. I beg to move.
	Amendment 19 agreed.
	Amendments 20 and 21
	 Moved by Lord Hunt of Kings Heath
	20: Schedule 6, page 239, leave out lines 31 and 32 and insert—
	""responsible regional authorities" has the same meaning as in Part 5 of the Local Democracy, Economic Development and Construction Act 2009 (regional strategy)."
	21: Schedule 6, page 244, line 27, at end insert—
	"(c) the extent to which matters raised by representations falling within paragraph (b) have not
	been resolved,"
	Amendments 20 and 21 agreed.
	Schedule 8: Licensing: Minor and consequential amendments
	Amendment 22
	 Moved by Lord Hunt of Kings Heath
	22: Schedule 8, page 254, leave out lines 12 to 15 and insert—
	"(c) an exclusive economic zone, except any part of an exclusive economic zone in relation to which the Scottish Ministers have functions,
	(d) a Renewable Energy Zone, except any part of a Renewable Energy Zone in relation to which the Scottish Ministers have functions,"
	Amendment 22 agreed.
	Schedule 11: Consequential amendments relating to MCZs
	Amendments 23 to 26
	 Moved by Lord Hunt of Kings Heath
	23: Schedule 11, page 267, line 35, leave out "Chapter 1 of Part 5" and insert "section 128"
	24: Schedule 11, page 267, line 36, leave out "(marine" and insert "(byelaws for protection of marine"
	25: Schedule 11, page 267, line 38, leave out "Chapter 1 of Part 5 of that Act" and insert "section 133 of that Act (orders for protection of marine conservation zones)"
	26: Schedule 11, page 268, leave out lines 1 to 4 and insert—
	"(3) The provisions of Chapter 1 of Part 5 of that Act relating to byelaws under section 128 or orders under section 133 apply, with the modifications described in paragraph (3A) of this regulation, in relation to byelaws made by virtue of paragraph (1) of this regulation or (as the case may be) orders made by virtue of paragraph (2) of this regulation.
	(3A) The modifications are—
	(a) any reference to an MCZ is to be read as a reference to a European marine site;
	(b) in sections 128(1) and 133(1), the reference to furthering the conservation objectives of an MCZ is to be read as a reference to protecting a European marine site;
	(c) the reference in section 128(3)(c) to hindering the conservation objectives stated for an MCZ is to be read as a reference to damaging a European marine site."
	Amendments 23 to 26 agreed.
	Schedule 19: Schedule 1A to the 1949 Act
	Amendment 27
	 Moved by Lord Goodlad
	27: Schedule 19, page 300, line 35, at end insert—
	"(12) The determination of the Secretary of State must comply with the recommendation of the appointed person unless, in the opinion of the Secretary of State, there are exceptional circumstances."

Lord Goodlad: My Lords, Amendment 27 stands in my name and that of the noble Lord, Lord Pannick. I reiterate my gratitude to the Government and, in particular, the Minister, for their response to the recommendations of your Lordships' Select Committee on the Constitution on the right of those affected to appeal to an independent person. Amendment 27—which, I emphasise, does not reflect the unanimous view of members of the committee—seeks to enhance and reinforce the other safeguards now written into the Bill to ensure that,
	"the Secretary of State must comply with the recommendation of the appointed person unless, in the opinion of the Secretary of State, there are exceptional circumstances".
	Otherwise, why have an appointed person? Perhaps the Minister might add a word about the future role of the Planning Inspectorate in this context.
	Amendment 27 would add transparency, fairness, stability and an element of predictability, although obviously not certainly, to the arrangements envisaged in the Bill and would accord with everyday common sense. The amendment would not of course dilute in any way the accountability of the Secretary of State to Parliament. I beg to move.

Lord Morris of Aberavon: My Lords, I support the noble Lord, Lord Goodlad, the chairman of the Constitution Committee, of which I am a member, in his thanks to the Government for agreeing that there should be a right of appeal. That has been the consistent line of the Constitution Committee throughout, and it is of the utmost importance that a right of appeal is seen to be transparent.
	Having gone that far, I fear that I cannot agree with the noble Lord on this amendment. The procedures described in the clause state that, as in most planning considerations, a person is appointed to hear evidence. That is the basis on which the bulk of planning decisions are taken. Having heard admissible evidence, the planning inspector, in due course, makes recommendations to the Secretary of State for his determination. It is the Secretary of State's decision, and his alone. He is accountable, in general, to Parliament. In particular instances, a rare procedure of having a parliamentary debate on the matter can be invoked.
	I got into a great deal of hot water as a planning Minister for six years in Wales, when I determined, as regards the future of industrial development in Ebbw Vale, following the closure of the steelworks, that I had to overturn the recommendation of the planning inspector, who wanted to fill in various parts of the area with the odd bit of industrial development. I took the holistic view that the only way to give hope to that community was to ensure that particular land was designated on a sufficient scale to provide the basis for attracting industry, and that you would not achieve that in the same way if you were merely in-filling pockets.
	In those circumstances, the decision of the Secretary of State would be limited, if this amendment were to be accepted, because he,
	"must comply with the recommendation of the appointed person unless, in the opinion of the Secretary of State, there are exceptional circumstances".
	What on earth are "exceptional circumstances" in this context? If the amendment were to be passed and if exceptional circumstances can be defined, the decision would be taken away from the Secretary of State and his power would be extremely limited. First, this is not workable, and, secondly, it abdicates the responsibility of the Secretary of State, because such matters should be for his determination, and his alone.

Lord Pannick: My Lords, I support the noble Lord, Lord Goodlad. The background to Amendment 27 will be very familiar to your Lordships. As originally drafted, the Bill lacked an appeal provision for those affected by the coastal access duty. This was criticised by your Lordships' Constitution Committee, chaired by the noble Lord. In Committee, many noble Lords suggested that an appeal procedure was necessary. To his great credit, the Minister listened. He and his hard-working officials tabled on Report the detailed amendments which are now Schedule 19 to the Bill, creating a right to have the matter considered by the person appointed. These provisions, however, have a serious defect. They leave it entirely to the discretion of the Secretary of State whether to accept or to reject the views of the person appointed—indeed the factual findings of the person appointed. There is no attempt in Schedule 19 to confine the power of the Secretary of State to overturn the recommendation of the person appointed to issues of policy or to cases where there are broader implications of the recommendation.
	As often occurs in planning matters, as the noble and learned Lord, Lord Morris, suggested, the noble Lord gave a very good example from his own experience. I entirely accept that in that type of case the Minister should have power to overturn the findings of the person appointed. Amendment 27 seeks to confine the discretion of the Secretary of State to overturn the recommendation of an independent person who has the statutory responsibility of considering representations and doing so in a context concerned with a person's rights—here the right to property. This is particularly important when the Joint Committee on Human Rights has advised that a lack of an appeal to an independent person with a power to determine questions of fact would be a breach of the European Convention on Human Rights.
	I thank the Minister and his officials for their considerable courtesy in discussing this matter with the noble Lord, Lord Goodlad, and with me during the past week. As I understand the departmental concern—the Minister will explain it more fully and more eloquently—it is that the Secretary of State must have the power to take account of the general implications for the coastal route. The person appointed is concerned only with the specific piece of land. The Secretary of State, however, needs to have in mind the broader picture.
	I understand and accept that policy concern. I do not understand, however, why it justifies the breadth of the discretion conferred on the Secretary of State. On Report, the Minister told the House at col. 50 that it would be "extremely unlikely" that the Secretary of State would depart from the recommendation of the person appointed. Since the Minister recognises and accepts that it would be extremely unlikely for the recommendation of the independent person to be displaced, surely it is appropriate to include in the provision a sub-paragraph that recognises that matter and gives a degree of assurance to landowners and to all other interested persons.
	Our amendment therefore seeks to make the position clear in this respect. If Amendment 27 were to be approved, the Secretary of State would still have ample power to overturn the recommendation of the person appointed in the type of case that the noble and learned Lord, Lord Morris, envisages. That is a case where there is some policy concern and some general issue relating to the coastal route which has not been adequately addressed by the person appointed. The noble and learned Lord, Lord Morris, asks, "What does 'exceptional circumstances' mean? It is a broad and general phrase". Precisely so. The purpose of the amendment is to confer a discretion on the Minister to depart from the views of the person appointed but to do so only if there is something unusual or exceptional about the case and not simply because he disagrees with the person appointed on a matter of fact.
	The Minister has tabled Amendment 28, which goes a long way towards meeting the points that I have raised. I am most grateful to him and his officials for listening and for acting on the points raised by the noble Lord, Lord Goodlad, and by me. However, I have concerns about that amendment. It states the principle that the Secretary of State will be bound by the opinion of the person appointed but it makes this subject to four exceptions. Exceptions (c) and (d) are, I accept, principled exceptions. Of course it is right that the Secretary of State should not be bound by a finding by the person appointed which is made,
	"by reference to irrelevant factors or without regard to relevant factors",
	or a finding that is "perverse or irrational". That is entirely so. Exception (b) provides that the Minister is not bound by the factual conclusion of the person appointed if there is,
	"insufficient evidence to make the finding".
	That, too, is principled if—and I should welcome the Minister's assurance on this—it means that the Secretary of State concludes that the person appointed could not have properly made the finding on the evidence available to the person appointed at the time that he made his recommendation. That leaves exception (a),
	"that the finding involves an assessment of the significance of a matter to any person with a relevant interest in land or to the public".
	That causes concern because it allows the Secretary of State to conclude that, even though the person appointed finds that the matter is of great importance to the landowner and even though that finding cannot be challenged under exceptions (b), (c) and (d)—in other words, there is sufficient evidence for the finding, it is based on relevant factors and is not perverse—he can still substitute his view for that of the person appointed on that factual matter.
	I therefore prefer Amendment 27. It is clear, it is sufficiently flexible and it accords with the Minister's assurance on Report that only in rare cases would the Secretary of State override the views of the person appointed.
	Perhaps I may briefly mention two other matters. I understand that the Secretary of State will be making regulations to ensure that, if he proposes to depart from the findings of the person appointed, a fair procedure must be followed which gives the landowner an opportunity to address the issues before the Secretary of State. I should very much welcome the Minister's confirmation that such regulations are intended to be made.
	The second and final matter I ask the Minister to deal with is this: I understand that, contrary to the expectation he stated on Report, it is no longer envisaged that the person appointed will be a member of the Planning Inspectorate. Can the Minister clarify who will now be the appointed person or persons to perform this important function, and can he assure the House that they will be independent, and seen to be independent, of the Secretary of State?

Lord Rowlands: My Lords, I, too, am a member of the Constitution Committee and during all our discussions on this Bill, I have emphasised the tremendous value of coastal access. I happen to live quite near a coastline in south-west Wales, and I have witnessed the enormous benefit, both in health and recreational terms, of coastal access. Like all members of the Constitution Committee, I felt strongly that there should be some kind of planning appeal procedure, though I did not want the old-fashioned kind, which has often led to interminable delays and been extremely expensive. I believe Ministers have come forward with a workable alternative appeal procedure, which I welcome and support. As other members of the committee have testified, we are indebted to the way in which Ministers have responded to the representations we have made. I am more than content that an appeals procedure is in place that is of a character which will not mean that coastal access is somehow continually delayed or prevented, while at the same time protecting the rights of citizens and property owners.
	On the last point, I share the view of my noble and learned friend Lord Morris. Under his jurisdiction, when he was Secretary of State and I was a Minister in the Welsh Office, I came across cases where it was the view of the Secretary of State and the department that the Secretary of State should have the right to overrule planning inspection findings of one kind or another. I think that power must remain with the Secretary of State.
	The question is whether we should limit it in the way Amendment 27 proposes, or in the way the Government's Amendment 28 proposes. Given the fact that I, too, am not certain how one would define "exceptional circumstances", I believe Ministers have responded to the points made by the Constitution Committee, as represented by Amendment 27, and I find Amendment 28 very reasonable. It comes a long way to meet the concerns of most of the members of the Constitution Committee. I, therefore, support Amendment 28 and, sadly, if Amendment 27 is pressed, I shall not be supporting it.

Lord Montagu of Beaulieu: My Lords, on Second Reading I declared an interest as the owner of an estuary and some miles of Solent shore where for years my family has given public access, including a nature reserve. It did not feel right to intervene in Committee because of the extent of my knowledge of the situation. Now we are sending the Bill to another place, I want to say how delighted I am that progress has been made to make it a fairer and more workable situation. At an early stage, the Government stated that parks and gardens would be excepted, but later they retreated from this position and inserted the word "curtilage". I fear that the reference to curtilage will lead to many time-consuming disputes. I therefore urge the Government to provide in another place that that is replaced with "parks and gardens", which is much more understandable.
	The Government have made a very welcome concession on the important principle of an independent appeal. I am most grateful. I welcome that, but we must ensure that the Bill has clauses that give weight to legitimate concerns, such as those of coastal owners and businesses.
	The legislation has being drawn up on the assumption that rules and definitions of a coastal plan can be applied in the same way to a river valley. That is oversimplistic. Rivers are very different animals. They are often lined with high levels of residential and commercial property, while in other places there are sensitive nature reserves. Where a coastal path meets an estuary, for instance, I urge that the two sides of the river are as much as possible joined by one existing right of way. Sometimes, these will be further inland, but such a scheme would be much easier to implement.
	Finally, I am deeply concerned that in the passage of the Bill the need to safeguard wildlife has been largely ignored. Our coasts and estuaries contain some very important havens for animal life, but their condition could well be threatened. Let us be honest and say that there is a clash between nature and government policy. On the assumption that Natural England will decide on the route, it must make quite sure that it does nothing that would harm natural life. I fear that it will be overruled by its political masters. At a time when bird numbers are diminishing and birds are becoming extinct, it is very important that we apply the Sandford principle, that nature should take precedence over humans.

Lord Greaves: My Lords, I oppose the amendment in the name of the noble Lord, Lord Goodlad; we are prepared to support the government amendments. If we go right back to the Bill's introduction to this House—and before, when we were discussing it in pre-legislative forums—a strong view was put forward by Natural England, the recreational groups and everyone else that we do not want the precise system of appeals that we have under the CROW Act, because they have been time-consuming, expensive and, in many cases, have not produced the right results. They are based on the appeal system under the planning system; the system is almost exactly the same. That may be appropriate for planning, but it has turned out not to be too good for CROW land.
	The other side of the argument was that people with land rights ought to have a right of appeal to an independent tribunal where they can put their views forward and where their objections can be independently and objectively assessed in a fair, reasonable and transparent way.
	I believe that both those points of view were correct. I had arguments with my friends in the recreational user groups, for example, because it seems to me as a Liberal that not having independent system of appeal was quite wrong. I believe that the government amendments that were agreed on Report go a long way to providing a system that provides both those requirements. I also believe that the amendments that the Government are putting forward today are a further step towards a system which is acceptable and workable. It clearly has to be both.
	I listened very carefully to the case that the noble Lord, Lord Pannick, put forward, which was persuasive as usual. His amendment talks about exceptional circumstances. The noble Lord said that it seeks to make the position clear. I do not agree that the words "exceptional circumstances" make the position clear at all, because there is no definition of what these are. He went on to say that it is a "broad and general statement" as to what they would be.
	The Government seem to be putting this forward fairly specifically, and I welcome that. The noble Lord referred to four specific criteria. I find myself in a slightly difficult situation at the moment because I am speaking to a government amendment that has not yet been moved by the Government, and I do not wish to do that for them. B, C and D seem to be cases where the decision of the inspector is wrong, for the reasons set out, and that can be clearly established, but decision A, which the noble Lord, Lord Pannick, did not like, seems crucial because it introduces the concept of the public interest, as well as the private interest of the people with interests in the land.
	It does what I have been trying to get the Government to do for some time, which they have been resisting in Committee and on Report—to relate the whole question of fair balance, which is the criteria they have got, between the perfectly proper interests of landowners and others with interest in land, the perfectly proper interests of recreational users, and the public interest in creating the coastal route. I have been trying to relate that concept of fair balance to the fundamental objectives of the coastal duty, as set out in Clause 289(2), which are the requirements to provide the route and the coastal margin or access land. The Government are now doing that. They are setting the work of the inspector and the decision of the Secretary of State on the basis of the inspector's report, firmly in the context of the coastal duty. That is right and proper. Some of that is not and cannot be factual. It is a matter of assessment, opinion and judgment. That is where, surely, the Secretary of State ought to have discretion.
	The noble and learned Lord, Lord Morris, referred to planning appeals. He is absolutely right. In the ward that I represent on the local council, two or three years ago there was an infamous planning application for a new housing estate, and the decision took about three years. The local council turned it down, it went to appeal, the inspector found in favour of the appellants, it went to the Secretary of State, who at the time was the Deputy Prime Minister, and it sat on his desk for about two years. Eventually, he overturned the decision and recommendation of the inspector. He did it, whether right or wrong, for reasons of overriding public, government and planning policy. Indeed, he did it for reasons which did not exist when the appeal took place. If the amendment proposed by the noble Lord, Lord Goodlad, were to be accepted in its present form, it would leave it wide open for any landowner to seek to wreck the scheme and the coastal route proposals in any particular place. If we have an overriding coastal access duty to provide the route, it ought not to be open to one particular landowner to block one part of the coastline simply because it is not for his personal convenience.
	I accept that cases will arise where people are aggrieved about the line of the route and the access land, but under those circumstances there must be an overriding consideration that the route should go through. People cannot be allowed simply to block it because they do not like it, and that is what would happen if we had CROW-type appeals. The Government briefing—again I run the risk of speaking to their amendment before they do—puts forward the case that the Secretary of State must have the right to look at a whole stretch of route and not the particular piece of land that is being appealed, which is what happens in CROW cases. The requirement that there should be consistency when it comes to headlands, estuaries and so on must be right. It cannot be open to objectors in particular places to argue a sui generis case for themselves independent of what happens with the rest of the route. Consistency is important. The idea that one narrow piece of land could be considered on its own and be binding on the Secretary of State is surely wrong. If the movers of the amendment are saying that these would be exceptional circumstances, they ought to propose the much clearer wording set out in the government amendment.
	Facts are facts. Many of the decisions that will have to be made on where the access land should come from and where the route should go will be matters of judgment of the particular circumstances of the case. Attempts should be made to reach agreement between the parties, but where it cannot be reached, the overriding consideration should be that the public interest and that of this legislation must prevail. That is not the case in CROW appeals where the vegetation on the land is a matter of fact whether it is mountain, heath, moor or down. Opinions come into it, but the land is either heather or it is not, either crops are being grown on it or it is natural grassland. Factual decisions are much easier to reach, but they will be much more difficult to make on the coast. Therefore I am afraid that the amendment of the noble Lords, Lord Goodlad and Lord Pannick, although probably unintentionally, is a wrecking amendment. I am astonished at how far the Government have been able to go in order to satisfy the case put forward by the various committees on human rights and the constitution, and it is right that they have done so. They have gone 95 per cent of the way and there comes a time when people should say thank you very much rather than try to push for the extra 5 per cent that, in my view, runs the risk of wrecking this great project.

Lord Taylor of Holbeach: My Lords, I thank my noble friend Lord Goodlad for tabling the amendment and for giving us the opportunity to look at this point again. As chairman of the Constitution Committee, he has been extremely effective in pressing this issue. It was good to hear the contributions of noble Lords to this debate, particularly the contribution of my noble friend Lord Montagu of Beaulieu, who has a great interest in the coastal route and a great sensitivity about the way in which it can be constructed.
	As I made clear on Report, I share the concerns of my noble friend Lord Goodlad about the possibility that the Secretary of State would be able to ignore the findings of the planning inspectorate and insist that the route be imposed even in contravention of a fair balance. The Government's amendments in this group go some way towards alleviating my concern. I understand fully their desire to keep some flexibility, in the event a finding was perverse or otherwise fell into the reasons laid out in proposed headings (a), (c) and (d) of Amendment 28. As noble Lords have said, it is the Secretary of State who is ultimately democratically accountable and he must take the final responsibility.
	I am still a little worried—and certainly much more worried by the contribution of the noble Lord, Lord Greaves, who seems to have put his own interpretation on the amendments—by proposed heading (a). I understand that the significance of the unfairness should be a contributing factor. A minor breach of fairness is obviously less serious than a major breach and I can appreciate why such a consideration could potentially make for a decision to be ignored. The legislation would be better drafted to make it clear that heading (a) is applicable only when the breach is insignificant or minor.
	The Government's Amendment 29 reassures me a little. Proper transparency will help ensure sensible decision-making but I would not be surprised if my honourable colleagues in another place want to look carefully at these provisions once the Bill arrives there from your Lordships' House. However, I do not wish to sound churlish when the great distance we have travelled on this issue has been a wonderful example of constructive debate. I thank the Minister and his department for moving so far.

Lord Hunt of Kings Heath: My Lords, this has been an interesting and apt debate on which to end our deliberations on the Bill. Although we are disagreeing on the final wording in relation to the review process, we should not underestimate the amount of consensus that has been built. It is very important that, as the Bill leaves the House, we should reflect on that consensus. It has a further journey to travel in another place, where I am sure that our debates here will be reflected upon. No doubt there will be considerable scrutiny there too, particularly in relation to the review process.
	I listened with great interest to the comments of the noble Lord, Lord Montagu, and I know he is concerned about damage to the environment. I understand that concern. He made it clear that there is a real challenge for Natural England to ensure that damage does not occur to the environment. I agree that the responsibility on Natural England is weighty indeed. I am sure it will be aided by the significant role that local authorities are to be given, as we have debated in previous stages of the Bill.
	I shall deal with Amendment 27 before turning to my amendments. I want to reiterate and assure noble Lords that the Secretary of State would not depart lightly from the recommendations of the appointed person. Section 52 of the 1949 Act requires the Secretary of State, before reaching a determination on whether to approve Natural England's proposals with modifications, to consult Natural England and such other authorities and persons as he thinks fit. Paragraph 16(3) to (5) of new Schedule 1A gives the Secretary of State power to make provision in regulations about the procedure to be followed where he is minded to approve proposals with modifications other than modifications made in accordance with the recommendation by the appointed person and to apply any provision of Schedule 1A. Any requirement proposed by such regulation is in addition to the duty to consult under Section 52(1). I am happy to give an assurance to the noble Lord, Lord Pannick, that the Government intend to exercise that power so as to provide for consultation before the Secretary of State decides to approve the proposals with modifications other than any recommended by the appointed person.
	On the amendment of the noble Lords, Lord Goodlad and Lord Pannick, I, too, reiterate the particular thanks to the committee of the noble Lord, Lord Goodlad, and to the work of the noble Lord, Lord Pannick, in enabling us to come more closely together, even if we have not quite reached agreement yet. However, we have concerns with Amendment 27. First, there is the use of the word "exceptional". I understand the noble Lord, Lord Goodlad, saying that it was a common-sense approach. Unfortunately, as my noble and learned friend Lord Morris has made clear, when it comes to legislation—indeed, as the Chamber has filled up with noble Lords who are, I am sure, taking a close interest in the Bill, the many of them who are distinguished lawyers will know this—the problem is that we do not really know what that word means. It could lead to actual uncertainty and disputes; that is one of our problems here.
	Secondly, to preclude the Secretary of State from reaching his own view on where the fair balance lies would be inconsistent with his discretion to approve the proposals, with or without modifications, under the 1949 Act. Thirdly, the amendment would prevent the Secretary of State from achieving consistency of approach relating to Natural England's proposals as a whole and to any other proposals. I think that was a point that the noble Lord, Lord Greaves, made. It is nice to have the noble Lord on my side, if only, alas, on Third Reading. None the less, it is extremely welcome.
	There may well be other parts of the route where similar considerations arise but which have not been the subject of objections. The question would then arise whether the decision of the appointed person relating to an objection to one part of the route constrained the Secretary of State from achieving consistency between that part and others where no objections had been raised, or constrained him to achieve consistency only in the manner of the appointed person's decision relating to the objection. It would be difficult to require the inspector to consider everything that the Secretary of State takes into account. It would not seem appropriate to require the inspector to consider representations relating to other parts of the route that are not subject to an objection, but those representations might mention considerations relevant to maintaining a consistent approach to the route which is the subject of the report as a whole, or to the whole English coastal route.
	I am grateful to noble Lords who have discussed my amendments. Amendment 28 deals with what happens when the appointed person considers a question of fact. It has been produced as a result of discussions that have taken place with noble Lords after the noble Lord, Lord Pannick, made his comments on Report; there have also been helpful discussions since then. The amendment means that where the report of an appointed person on an objection,
	"contains a statement of a finding of fact, the Secretary of State in making the determination",
	would be
	"bound by that finding unless the Secretary of State is satisfied",
	either that it was
	"perverse or irrational",
	in one of the ways in which a court might find an administrative decision perverse or irrational on judicial review, and set it aside, or else that it,
	"involves an assessment of the significance of a matter to any person with a relevant interest in land or to the public".
	That latter condition is necessary to ensure that the Secretary of State is not precluded from reaching a view on the significance to the landowner or the public of, for example, the proposed position of the route. It provides clarification that such an assessment is not to be treated as a simple "finding of fact" for the purpose of this schedule. It would be wholly inappropriate to include provision which constrained the Secretary of State's discretion in relation to the essential question that he is required to decide—that is, where the fair balance lies—so that he was bound by the decision of the appointed person and thereby unable to ensure that the proposals submitted for his approval fit together properly and are broadly consistent in their overall approach and with that taken in any other proposals that he has previously approved. Again, that is a point that the noble Lord, Lord Greaves, commented upon. That would be a recipe for unfairness and legal challenge to the overall result, in circumstances when the legislation had in fact tied the hands of the Secretary of State in relation to any matter that had been the subject of an objection and thus of a decision by the appointed person.
	The conditions in headings (b) to (d) mirror the standard criteria governing the limited circumstances in which a court on judicial review can quash a decision on a finding of fact: that there was insufficient evidence to make it; that it was based on irrelevant considerations or failed to take into account relevant considerations; or that it was otherwise perverse or irrational. Of course, if the Secretary of State himself or herself makes an irrational decision in concluding that the appointed person's finding of fact was irrational in one of these ways, the Secretary of State would be liable to judicial review.
	The noble Lord, Lord Pannick, asked me if the exception in heading (b) means that the appointed person could not properly have made the finding on the evidence available to the appointed person at the time. The answer is yes, that is exactly what it means.
	I hope that Amendment 29 further reassures the House. It means that where the Secretary of State does not follow a recommendation on a statement of fact—that is, in the circumstances noted in Amendment 28 that I have just described—the statement of reason required by paragraph 17(4) of Schedule 1A to the 1949 Act must also include the reasons for not following the recommendation. That paragraph relates to the statement of reasons that the Secretary of State must provide for his decision in relation to an objection when making a determination on a coastal access report.
	I hope that I can clear up any concern about the Planning Inspectorate. The reason why the Bill does not make a direct reference to inspectors of the Planning Inspectorate is that we would not normally expect to be so specific in the Bill. I readily acknowledge the distinguished record of the Planning Inspectorate, but that inspectorate might alter, disappear or change its name at some time in the future. The current wording of the Bill preserves the ability to change the appointed person in the future if necessary, and it is worth bearing in mind that the Planning Inspectorate is not a body established by statute, so this flexibility is of particular relevance.
	There may be cases where the Secretary of State might decide that the most appropriate person to refer objections to is someone other than the Planning Inspectorate. I acknowledge that the current wording gives us flexibility to do this, but, if that were to happen, I am happy to assure noble Lords that we would expect that person to be of similar independence and calibre. The intention, though, is that we would turn to the Planning Inspectorate.
	At the end of the day, there is only a narrow gap between us. The Government have listened carefully, which is why we now have a review procedure. I hope that my amendment provides some reassurance too. The Bill has quite a long way to go, but this is a satisfactory outcome. I am grateful to noble Lords for their contribution.

Lord Goodlad: My Lords, I warmly support government Amendments 28 and 29. I am extremely grateful to the Government for coming as far as they have, and I reiterate my particular thanks to the Minister for his unfailing courtesy during our proceedings in meetings and in correspondence. I hope that during the Bill's further proceedings in another place, it may be possible to produce further refinements to these proposals to take account of the considerations expressed in this helpful debate, particularly by the noble Lord, Lord Pannick. I beg leave to withdraw the amendment.
	Amendment 27 withdrawn.
	Amendments 28 and 29
	 Moved by Lord Hunt of Kings Heath
	28: Schedule 19, page 302, line 28, at end insert—
	"(2A) Where a report required to be considered under sub-paragraph (1)(c) contains a statement of a finding of fact, the Secretary of State in making the determination is bound by that finding unless the Secretary of State is satisfied—
	(a) that the finding involves an assessment of the significance of a matter to any person with a relevant interest in land or to the public,
	(b) that there was insufficient evidence to make the finding,
	(c) that the finding was made by reference to irrelevant factors or without regard to relevant factors, or
	(d) that the finding was otherwise perverse or irrational."
	29: Schedule 19, page 303, line 27, at end insert—
	"( ) Where the Secretary of State was required under paragraph 16(1)(c) to consider a report and the Secretary of State in making the determination does not follow a recommendation in the report, the statement of reasons required by sub-paragraph (4) must also include the reasons for not following the recommendation."
	Amendments 28 and 29 agreed.
	A privilege amendment was made.
	Motion
	 Moved by Lord Hunt of Kings Heath
	That the Bill do now pass.

Lord Hunt of Kings Heath: My Lords, it is worth reflecting that we are one week short of six months spent on our deliberations. I had thought that this might have been the longest-running Bill in the history of your Lordships' House. Alas, I am informed that the Animal Health Bill had its First Reading on 13 December 2001 and its Third Reading on 4 November 2002, but, although ours is not the longest-running Bill, my goodness me, we have certainly spent a long time at it.
	I wish to thank noble Lords for their close attention to this vital Bill, which has been hugely enhanced by the deliberations and changes that have been made in your Lordships' House. It is a tribute to the effectiveness of your Lordships' House as a revising Chamber. I pay particular tribute to the noble Lord, Lord Greenway, whose committee made so many helpful recommendations. I am grateful, as I have already said, to the noble Lords, Lord Goodlad and Lord Pannick, and to other noble Lords who have represented other Select Committees which have deliberated on the Bill. I thank, too, the noble Lord, Lord Taylor, the noble Earl, Lord Cathcart, the noble Duke, the Duke of Montrose, the noble Lord, Lord Greaves—many of whose amendments the noble Baroness, Lady Hamwee, courageously took on—and the noble Lord, Lord Livsey. I am grateful also to my Bill team, who have been a magnificent support.
	Believe it or not, it is World Oceans Day today. This was proposed in 1992 by the Government of Canada at the Earth Summit in Rio and has been unofficially celebrated every year since then. However, as of today, the UN has officially declared it. I can think of no better day for this House to pass a Bill which I am sure will enhance the marine environment in many years to come. I beg to move.

Lord Greaves: My Lords, I echo a great deal of what the Minister said—I was going to make the six-month point before he pre-empted me. I think that we have had 17 sessions, and there has hardly been a sitting week when there has not been a day on the Marine and Coastal Access Bill. It has been an extraordinary marathon. During the passage of Animal Health Bill the Liberal Democrat Front Bench consisted of my noble friend Lord Livsey of Talgarth and me, so I hope that the Government do not bring along any more Bills for us in the near future.
	I understand that the Minister is moving out of Defra and is taking on greater responsibilities in DECC. We congratulate him on that and thank him—I believe, on behalf of the whole House—for his work during his time as a Defra Minister, which has not been as long as some. During my time here this House has benefited from some really good Defra Ministers, regardless of politics, and the Minister will go down in the record book as one of them, if only for this Bill if for nothing else.
	I thank all Members of the House for their co-operation, which has been so important. That includes the noble Lord, Lord Taylor, and the Conservative Front Bench as well as old sparring partners such as the noble Baroness, Lady Byford. The Bill came to the House with great hope and expectation, but quite a lot of fear that the Government really did not mean what they had said while the Bill was in gestation. It had a huge amount of work done on it during the years before it came here, including in the committee chaired by the noble Lord, Lord Greenway, on which I was privileged to sit. I believe that while it has been here, we have given it a very thorough scrubbing down. It has also been significantly improved, which is a tribute to the whole House. I am very pleased that we on the Liberal Democrat Benches have been able to contribute to that. I am very grateful indeed for the support I have had from our team, which has made my life a great deal easier. I include my noble friend Lord Tyler, who abandoned us after Committee stage for other places, as well as my noble friends mentioned by the Minister. I refer in particular to my noble friend Lady Miller of Chilthorne Domer, whose expertise on the conservation side I found very valuable, and to my noble friends Lord Livsey and Lord Wallace of Tankerness for their Welsh and Scottish input. I will not say that my noble friend Lord Wallace is the predominant expert on Scotland in the House; I will say that no one is better than him. He knows as much about Scotland as anyone for obvious reasons.
	The ministerial team, the noble Lord, Lord Hunt, and the noble Lord, Lord Davies of Oldham, who has entertained us on a number of late evening sessions with his wit and his ability to talk about anything at any time of day or night in the hope that the rest of us go to sleep and do not pursue it further—I say touché to that—has been combative, has discussed and argued the case, and has then listened, understood and come back with compromise and consensus and understanding and explanation. They have been absolutely wonderful. Finally, I should like to say that the Bill team has been brilliant. Of all the Bills I have been closely involved with in the nine years that I have been in your Lordships' House, this is the best Bill team I have ever come across. It is a huge team obviously, because it is a huge Bill—but they really have been good. The amount of work, effort and discussion that they have been prepared to put in—beyond the call of duty, outside the formal sessions—has been superb. That has been a major contribution to the fact that this Bill really is a good Bill leaving this House.
	When this Bill finally gets through the House of Commons and becomes law, perhaps the Bill team leader, Mrs Linskey, might take six months off and write the definitive work on the relationship between devolution and the maritime environment. We send this Bill to the House of Commons with continued hope and expectation. All we can do is hope that the House of Commons will improve it further and then send it back to us for our final approval.

Lord Taylor of Holbeach: My Lords, I apologise to noble Lords who are here for the following programme for the delay but it is one of the delights of this House that, at the conclusion of the debates on the Bill, we have a chance to say thank you. I should like to start with acknowledging the role played by the noble Lord, Lord Hunt, as principal Minister on the Bill. We are very sorry that he is relinquishing the Defra brief but he has been incredibly busy over these past few months, in particular with the responsibilities for this Bill.
	I shall turn, if I may, to those to whom I owe the greatest debt—my own team. I have been really well supported, not only from the Front Bench but also from the Back Benches. I am grateful for the support I have had from my noble friends Lord Kingsland and Lord Goodlad and my noble friend Lady Byford. I thank my noble friend the Duke of Montrose and my noble friend Lord Cathcart for their particular support. Contributions from all parts of the House have greatly strengthened the quality of our debates, built as they have been on the work of the Joint Committee of both Houses, chaired by the noble Lord, Lord Greenway, which has given an authority to much of what we discussed.
	The Ministers have listened to the debates with respect and that respect is reciprocated. The noble Lords, Lord Hunt of Kings Heath and Lord Davies of Oldham, have, as I said, responded to our debates and listened to our concerns. The Bill is so successful because they have been prepared to listen and, more to the point, to act. They and the Bill team will be delivering the Bill in much better shape than it was when it arrived. After the debates in this House the Bill will move on with the authority of this House and in a much better condition. It is a great challenge to establish marine conservation zones for the first time and to establish the right of access around our coast. These are great challenges and the legislation has in some cases been very complex. I join other noble Lords in the thanks they have given. A long journey it may have been, but it has been well worth while.

Lord Hunt of Kings Heath: My Lords, I should like to respond to the kind comments of both noble Lords. On the importance of the legislation, it is unlikely, as has often been said in our debates, that other marine legislation will be coming to your Lordships' House for many a year once this Bill is enacted. It was therefore vital to achieve a consensual approach so that there was confidence in the shape of the legislation. I reiterate my thanks to all noble Lords who helped that to happen.
	The Bill team has been magnificent; I very much echo the remarks of the noble Lords, Lord Greaves and Lord Taylor. As for the six-month leave of absence, I doubt whether that is enough to write a treatise on devolution and the marine environment, although I suspect that there is a PhD in there for someone. Finally, I have had my noble friend Lord Davies beside me. It is the first time that I have worked with him on a Bill in detail. He has been a magnificent support. He does extraordinary service to the House and it is a real pleasure to have worked with him.
	Bill passed and sent to the Commons.

Criminal Justice: Sonnex Case
	 — 
	Statement

Lord Bach: My Lords, with permission, I should like to repeat a Statement made earlier today in another place by my right honourable friend the Lord Chancellor and Secretary of State for Justice.
	"With permission, Mr Speaker, I would like to make a Statement on the case of Dano Sonnex.
	Last Thursday, Sonnex was convicted with Nigel Farmer of the brutal and sadistic murder of two French students, Laurent Bonomo and Gabriel Ferez. They were killed on 29 June last year at their flat in New Cross in the London Borough of Lewisham.
	I know I speak for the whole House in sending our deepest sympathies to the families of the two young victims of this appalling crime. I have twice met the families and have discussed the case with the French Ambassador. The families will continue to be given every possible support in their time of grief.
	Sonnex was a serious criminal. At the time of the murders he could and should have been in custody.
	The background is as follows. In 2003, Sonnex was sentenced to eight years' imprisonment for multiple offences. He behaved violently in prison and admitted to a prison medical officer that his 'reactions could kill'. He was released from prison on 8 February 2008, the latest date he could lawfully be held in custody, having twice been refused parole. He was on licence, liable to recall, until 11 October.
	On Sonnex's release, there were serious failings by prison and probation staff. Potentially crucial information such as that from the medical officer, which I have just quoted, was not shared between the prison, police and probation. Sonnex was never adequately assessed for risk, or considered for multiagency public protection arrangements, both of which would have resulted in more intensive community supervision.
	Within days of release, Sonnex and another individual were alleged to have tied up a relative and her partner and violently threatened them. The allegations were subsequently withdrawn, so the police pursued the matter no further. Probation staff then judged that this incident merited nothing more than a formal warning. This was clearly a further error. The seriousness of the allegation warranted a revised risk assessment and referral to a multiagency public protection panel. This did not take place.
	In the event, Sonnex did comply with his licence requirements until 23 April, when he was arrested for handling stolen goods and remanded in custody. On 3 May, his offender manager initiated the process to recall him to prison in light of the alleged offence. However, at a handling-stolen-goods court hearing on 16 May, Sonnex was granted bail. From the record of the hearing, it seems that the prosecutor believed that Sonnex was being recalled to prison anyway, and consequently did not oppose bail. But exactly what transpired is still not clear. What is clear is that Sonnex should not have been released onto the streets that day.
	The recall process was then poorly handled and subject to unacceptable delay by probation staff. In addition, the police failed to share information with probation that should have altered Sonnex's risk assessment. The recall was not submitted for approval to the NOMS Public Protection Unit until 12 June, which turned it around promptly and issued the recall revocation notice to the police the next day. The probation service labelled the recall as 'standard' rather than 'emergency', which meant that the police target time to return Sonnex to prison was 96 hours instead of 48.
	The execution of the warrant was complicated by police concerns about whether Sonnex had access to firearms. In the event, the police did not attempt to serve the warrant and arrest him until 29 June. This was a wholly unacceptable delay, and, tragically, too late for Laurent Bonomo and Gabriel Ferez, as it was the same day that the murders were committed.
	While responsibility for the murders lies with the perpetrators alone, the successive failings that I have outlined meant that Sonnex was free to kill these young men when he could and should have been locked up. This was not a question of poor resources, but of poor judgments and poor management within London Probation, as well as errors by the Metropolitan Police and the Prison Service. As Secretary of State responsible for the probation and prison services, I take responsibility for their failings, and the Metropolitan Police take responsibility for theirs. On behalf of each agency, I have apologised to the families of Laurent Bonomo and Gabriel Ferez, and I do so again today.
	Let me now set out the action that has been undertaken since these failures came to light in July last year. After the murders, London Probation held an immediate 'serious further offence' review into the case. This was completed in October 2008. In light of its findings, a more detailed NOMS investigation was established. Having considered this report, I determined with senior officials that the situation in London Probation warranted the most severe intervention statutorily available to me, and that the chief officer of London Probation would be suspended pending the results.
	Having been informed of this decision and having reviewed the investigation reports, the chief officer very honourably accepted responsibility for the failures and resigned on 27 February. Pending recruitment of a permanent replacement, I approved the appointment of an experienced former chief officer, Paul Wilson, to lead London Probation from March. Meanwhile, London Probation conducted disciplinary investigations into the staff directly responsible for managing Sonnex, which determined that the failings were due to factors beyond their control. As a result, one individual received mandatory retraining, but no formal disciplinary action was taken.
	Separately, in July 2008 the Metropolitan Police referred the case to the Independent Police Complaints Commission. The Met has accepted both the IPCC's subsequent recommendations, and the Home Secretary will ensure that they are urgently implemented by every force. One police officer received a disciplinary warning. The Met now has a unit in each borough dedicated to arresting wanted offenders. It has also put in place revised systems, with other agencies, to improve information-sharing and ensure the identification and timely arrest of such offenders.
	In February this year I agreed, following the chief officer's departure, that London Probation's performance should be subjected to the most intensive scrutiny available. London Probation is also taking steps to provide far greater senior level scrutiny and prioritisation of high-risk offenders. The new London Director of Offender Management will report monthly to my honourable friend the Prisons and Probation Minister on progress, and my honourable friend will update Parliament in the autumn.
	In March, I asked Her Majesty's Chief Inspector of Probation, Andrew Bridges, to conduct a series of case inspections in London. Mr Bridges has completed the inspection covering Greenwich and Lewisham, where Sonnex was managed, and has published his findings. Further reports will be published in the coming months. If I am not satisfied there has been significant progress, I will not hesitate to intervene again.
	Finally, every probation area in the country has been instructed urgently to re-examine the way they manage offenders presenting a risk of harm, in light of the failings in this case.
	All the investigation reports were published last Thursday as soon as the verdicts were known. Their recommendations have been accepted in full. Copies of the Serious Further Offence review, the NOMS report, the Chief Inspector of Probation's report and a London Criminal Justice Board report are available in the Vote Office and the House Library.
	The failings in the Sonnex case are a matter of profound sorrow and regret to everyone concerned. It is, however, important in considering this case that we do not unduly tarnish the work of all those dedicated professionals who deal every day with some of the most dangerous and unpredictable individuals in our society. But nor were these failures the result of a lack of resources. Probation funding has increased by 70 per cent in real terms since 1997. London Probation underspent its £154 million budget by £3.5 million last year. Rather, this was a failure to use resources effectively.
	When serious offenders are released into the community having completed their sentence, there will always be some risk that they will offend again. However, the criminal justice system has a duty to manage and minimise that risk. Where the system failed in this case, action has been taken. I will personally be monitoring progress until I am satisfied standards have improved. The safety of the public and the memory of the two young men whose lives were so brutally taken demand no less".
	I commend this Statement to the House. That completes the Statement.

Lord Henley: My Lords, I thank the Minister for repeating the Statement. I join him in expressing—as I think everyone in the House would want to—our deepest sympathy to the families of Laurent Bonomo and Gabriel Ferez. All of us were deeply shocked at the horrendous murder of those two young students by Dano Sonnex and Nigel Farmer. I think all of us agree—as the Minister made clear in the Statement—that nothing can excuse or detract from the personal responsibility of the perpetrators of these murders. However, no one can ignore the serious and systematic failures across the entire criminal justice system that led to those tragic deaths, nor this Government's gross dereliction of their first duty—to protect the public. Having said that, I am grateful that at least we had from the Secretary of State for Justice—as repeated by the Minister—a full acceptance of responsibility.
	The independent review into this case found errors of judgment, failures of communication and inadequate staffing levels. I say in passing, that the noble Lord told us that this was not a matter of resources and boasted, as always, of an increase in resources, but then said that there was underspend in London. I shall ask later whether that was a case of underspend in advance of further cuts in his department's budget. It also found wrong assessments and a whole series of systematic failures. Does the noble Lord accept that, faced with failings so wide and deep, it is inappropriate to single out one official for blame? Does he recognise the succession of breaches for which Ministers have, in the end, to bear the primary responsibility as a failure of government?
	The noble Lord gave some account of the career of Dano Sonnex, a dangerous criminal who slipped through every part of the system. His risk rating was mysteriously downgraded from high to medium. The probation officer in charge was overworked and overwhelmed. Even at this stage, tragedy was avoidable. Sonnex then—as the noble Lord told us—tied up a relative and her partner, held a knife to her throat and threatened them with a hammer. Fortunately, they managed to escape. Can the noble Lord explain just how, after that, Sonnex only received a verbal warning? He was then arrested for handling stolen goods. Obviously, these are only the crimes that we know about; there may be more. He was inexplicably bailed. We understand that prosecution counsel did not oppose this because Sonnex was not expected to get bail. Recall proceedings were initiated by the probation service but took over a month just to be processed. As the noble Lord admitted in his Statement, this is wholly unacceptable. By this time it was too late. I will not repeat the horrific trail of events that followed.
	These failings span our courts, the probation service and the Prison Service. Does the noble Lord accept that they are the direct result of an overcrowded prison estate, which has led Ministers to put concerted pressure on the courts and probation staff not to use custody, even when, as here, it was vital to protect the public? That is the primary duty of the Government. Does he accept that the failure to deliver on yet another IT system—namely C-NOMIS, which links the courts, prisons and the probation service—left staff ill-equipped to cope? The failure of IT systems is quite a constant complaint against the Government. Would the £40 million or so squandered on C-NOMIS have been better spent on strengthening front-line officer capacity? Does the Minister accept the independent review's finding that the local probation service was inadequately staffed, diluting the supervision of such a high-risk offender? Does he also accept its finding that the probation service focused on Sonnex's employment and accommodation needs, when its number one priority, as I said earlier, should have been public protection? This is yet another symptom of the Government's confused priorities, paralysis and lack of direction.
	Now we have the Government's response, which is merely to engage in further procedural tinkering. That is precisely the approach that the Secretary of State for Justice has adopted today. For example, probation officers will get new guidance and a new template for managing high-risk offenders. Such is the gulf between the challenges facing the probation service and the Government's capacity to meet them. I come now to the question of increased resources. The noble Lord said that there was an underspend in the London region. We understand that there will be some £30 million of fresh cuts to front-line probation services. Can the Minister confirm that? It is the equivalent of losing around 800 probation officers. Back-room bureaucracy bloats that even further.
	With the Justice Department issuing directions for probation reports on those released on licence for life to be reduced from every three months to every six months, how can the Justice Secretary give the House and the public the unequivocal assurance that these tragedies will not be repeated? I have put several questions to the noble Lord. No doubt others will be put to him, but I very much hope that, in the course of the afternoon, he will take the trouble to answer mine.

Lord Thomas of Gresford: My Lords, I, too, thank the Minister for his Statement. I concur with the sympathy that he has expressed towards the families of these two young men. In April 2008, Sonnex was arrested and charged with handling stolen goods. He was remanded in custody until 16 May 2008. The probation service told the court that a recall was in process and requested that remand continue. It appears that there was a misunderstanding. The court assistant thought that the recall would commence immediately and that there would be no need to deal with the question of bail, since Sonnex would already be in custody. Bail was not opposed and was technically and actually granted because of that mistake.
	The nub of the matter is that Sonnex was assessed as high risk in custody but the probation officer's assessment, as recorded, was that he was medium risk. The result of that discrepancy was that Sonnex was allocated to an offender management unit, rather than the higher level public protection unit. What was the reason for that? First, his probation officer had only been qualified for nine months and had a caseload of 127, which she inherited on appointment from an officer who was on sick leave. Immediately, on appointment, she was given 127 cases to handle. Her immediate superior was acting up and subsequently failed the assessment for permanent promotion. Levels of sickness and vacancy in the boroughs of Lewisham and Greenwich are much higher than elsewhere and staff at all levels reported that they were overwhelmed with work. The most experienced probation officer had been qualified for just two years. These staff were put in charge of a person who had been assessed as presenting a high risk of dangerous behaviour.
	Secondly, probation officers were discouraged from classifying offenders as high risk unless it was absolutely necessary, due to overstretch in the public protection unit. Such was the degree of overstretch that staff in the local public protection unit had issued a joint grievance statement in September 2008. The probation service was under conflicting pressures to recall cases speedily to ensure public protection on the one hand, but to avoid recalling them unless it was absolutely necessary on the other. They had to be sure that it was absolutely necessary because of prison overcrowding. It is wrong, then, to say that resources had nothing to do with this. One must look at the wider system. The resources that are made available to the criminal justice system have been slanted not towards the probation service but towards the creation of more and more prison places. This is a matter about which we have constantly complained from these Benches and we will do so again during the Bill that will start its Committee stage tomorrow.
	The problems are not rooted in individuals. Indeed, only one individual was criticised in the report and was disciplined simply by being given a written warning. It is not an individual failure; it is a failure of a chaotic prison policy and, in this case, a failure to implement effective IT systems. Chronic staff shortages have contributed to the failures that have been identified and the errors were not of judgment. The key error was inexperienced and inadequate supervision of Sonnex's probation officer. That, of course, arises from a lack of resources. As the noble Lord, Lord Henley, pointed out, London Probation's budget had not been completely used up. It is clearly a question of putting more resources into the probation service and reducing the pressure on the resources required for prison. There has to be a complete rebalancing of the way in which we deal with offenders. Certainly, offenders who are dangerous should be retained in custody, but many more could be released from prison without danger to the public; that would release resources for preventive work in the wider sense.
	I have only one question for the Minister in relation to the report of the IPCC investigation. That does not appear to have been released. The Minister said in the Statement that one police officer has been disciplined, but we were told nothing more. The report has not, as I understand it, been put into the public domain.

Lord Bach: My Lords, on that last point, as I understand it, headlines on the main points of that IPCC report have been published in the usual way, but not the full report. That is the usual way that these things are done. Before I continue, I thank both noble Lords from the Front Benches very much for what they had to say about this terrible case.
	I do not wish to be long in responding, but a number of points clearly need answering. The noble Lord, Lord Henley, asked about the assault allegation made against Sonnex days after he had been released. The complainants in that case withdrew their allegations and, consequentially, the police felt that there was no case against Sonnex. But of course, in the circumstances, that should have led the relevant probation service people to realise that something urgently needed to be done in terms of this man. That was one of the failings in this case.
	As far as the prison estate is concerned, it is not right and proper to say that this tragic double murder took place because too many people were in prison. The fact is that at least one person should have been, but was not, in prison on the day when Sonnex committed this murder. Nor is it right to say, in our view, that resources were at the heart of this matter. The truth is, as the director-general of NOMS said the other day, that,
	"This particular office was running very badly, there were very high levels of sick".
	The average number of sick days taken off was 27 per year. That was much higher than the overall average. The director-general continued:
	"staff were therefore dealing with too large a caseload. It wasn't being managed properly, which is why I think there were serious management failures".
	He went on to say:
	"We are sorting out those management issues and joining up prison and probation better to make sure information passes better".
	The noble Lord, Lord Henley, asked why an underspend was recorded in 2008-09. London Probation frankly should have aimed to make full and effective use of the budget that was allocated for that year. We do not recognise the figure that has been suggested of £30 million in cuts. Indeed, it is important to point out the amount of money that has been poured into the probation service over the past number of years—not just nationally, but into the probation service in London. I should point out to noble Lords that in 2001-02 the figure was £94 million; in 2008-09 it was £153 million. The number of probation officers nationally has increased by a large amount in the past 12 years or so. In particular, the number of probation service officers has increased by a huge amount in that time. There has been a lot of investment in the probation service. I am afraid that these tragic events happened because this particular part of the probation service in London just was not managed well in any sense at all.
	The noble Lord, Lord Thomas, said that staff were discouraged from assessing offenders as high risk, due to resources. We do not accept that for a moment. This has never been the case. We have been looking hard to make sure that appropriate risk assessments are made in every case.
	I think I have dealt with the questions that have been raised. This remains an absolutely tragic case and it is very important that everyone who has responsibility for it should take responsibility for it. That is what the Secretary of State has done and that is why he came before the other place to make this Oral Statement about this case.

Lord Lloyd of Berwick: My Lords, can the noble Lord tell us a little more about the nature of the offences for which Sonnex was sentenced to eight years' imprisonment in 2003? The offence for which he was arrested on 23 April 2008, and subsequently recalled, was not one of violence, but of handling stolen goods. Can the Minister say more about the circumstances of that offence, and whether there was any suggestion of violence at that time? The Statement is very hard on the failings of the probation service. No doubt, there were serious failings on its part, but does the noble Lord agree that the critical failure was the failure of the Metropolitan Police to execute the recall warrant between 13 and 29 June 2008? Can he say more about the reasons for that apparently unexplained delay?

Lord Bach: My Lords, I shall do my best to assist the House on the questions that the noble and learned Lord properly asked. The original crime committed on 13 May 2002, when Sonnex was 16 years old, was an unprovoked stabbing of a young man known to the accused. The victim received injuries to his chest and back, and he sustained a collapsed lung. On 13 September 2002, various robberies were committed by Sonnex. He was in possession of a blank firing pistol and a knife, both of which were used. He was then arrested and remanded in custody three days later, before coming before the court on 13 March the following year, 2003, and given a total of eight years' detention. At that time he was under 21. I am afraid I am not in a position to tell the noble and learned Lord what the facts of the offence of handling stolen goods were, except to say that until that time Sonnex had been clever enough not to breach the terms of his licence—he had turned up weekly. After that hearing he was bailed.
	I know that the Statement is hard on the probation service—the noble and learned Lord is right. My right honourable friend was careful to say—I repeat it now—that the point is not to unduly tarnish the work of those many dedicated professionals who deal each day with very dangerous and unpredictable individuals in the probation service. The noble and learned Lord points out that one of the worst aspects of this case was the delay between the police being told that this man should be picked up and his being picked up. We agree with that, although other important errors had been made before that time, not the least of which was the granting of bail on 16 May, and also the wrong description of him as being medium rather than high risk when he left prison.
	Why was there such a long delay before his arrest? The recall notice about Sonnex was classified as "standard", which means that action is dealt with when resources allow. The target time for this response is 96 hours. The matter should have been brought to the attention of the daily management meeting, however, for a decision. This did not happen due to confusion about responsibilities and misinterpretation. There is no excuse for what happened.

Lord Mackay of Clashfern: My Lords, I wonder whether the Minister could help the House on two matters. First, is it generally the policy of the police, and particularly the Metropolitan Police, that if serious allegations are made and then withdrawn, so far as they are concerned generally speaking that is the end of the matter? There may be a number of reasons why such allegations are withdrawn and threats are certainly a possible explanation. Secondly, in relation to the grant of bail, that was presumably a decision of the court. I am not sure who, under present arrangements, is responsible to account to Parliament for that. Has that been investigated and exactly what happened in that particular grant been identified?

Lord Bach: My Lords, as far as the police were concerned, I do not know whether they passed on the fact that this particular allegation had been made and then withdrawn. I can tell the noble and learned Lord that, as part of his seemingly good conduct towards his licence, Sonnex was clever enough to tell his probation officer that there had been this allegation made against him and no doubt went on to say that it was completely false and that it was proved to be false because the police were not continuing with the action. That is one way in which the probation service knew that this allegation had been made.
	As far as why bail was granted, as the Statement says, it is not absolutely clear, but it sounds as though there was a confusion between the prosecution service, which was under the assumption not to oppose bail for the comparatively minor offence of handling stolen goods, because it presumed he was going to be rearrested as soon as he left the dock, and the fact that that did not happen. When he was formally granted bail by the court, he left the court a free man. It was an inexcusable mistake.

Lord Anderson of Swansea: My Lords, my noble friend has said that Sonnex was never adequately assessed for risk or considered for multi-agency public protection arrangements, both of which, he has said, would have resulted in more intensive community supervision. Is not the sad fact of this case that, even if there had been more intensive community supervision, the tragedy could still have happened because, however intensive, it would still not have been comprehensive, 24-hour supervision? It is so easy to criticise members of the probation service who work in very difficult circumstances and with very difficult individuals. There seems to have been a hint in what my noble friend said that perhaps the probation service was rather more concerned with the welfare of the offender rather than with public protection. We see the fact that he was assessed as medium risk, as standard rather than emergency, and so on.
	However junior the front-line individual, or however shortly after their training this happened, was the failing in part a failure to refer up to someone who was more experienced? Were there failures of management in that sense, which could have produced a more mature judgment in respect of this individual?

Lord Bach: My Lords, I agree with my noble friend when he talks about the marvellous work that the probation service does in general. I accept that in any case, however intense supervision is, you may get people committing terrible crimes when they are on licence. That is true. In this case, this particular defendant, at the time the murder was committed, should have been in custody. That did not happen, however. The reason why he was considered high risk in prison was because he was seen by a doctor some years before, not long after he had started his long sentence, who, as I quoted in the Statement, had said that Sonnex thought he was capable of killing. Obviously, therefore he would have been considered high risk. When he came out of prison, because he was then an adult over 21, he was for some reason described as just a medium risk. Events followed on from that.
	The very junior or very inexperienced probation officer who had the misfortune to have control of this case, along with many others, sought advice from those above her. I am afraid that the advice she got was not good advice.

Lord Ramsbotham: My Lords, I am sure that the Minister will have read the very responsible and dignified statement made by David Scott, the chief probation officer of London, in accepting responsibility for this case and resigning. I am sure he will know as well that, in addition to being chief probation officer of London, David Scott was elected by his peers to be head of the National Association of Probation Officers, which was founded collectively to give a voice to the probation service which was denied to it when the post of director of the National Probation Service was removed under the latest NOMS agency directive. This meant that there was no professional head of the service.
	In that statement, he drew attention to some of the problems that he was facing. Before I ask my direct question, I must make two challenges to the Minister on what he said. Talking about budgets, I have already quoted in this House the statement made by the auditor of the London probation service that trying to manage that budget was akin to trying to land a jumbo jet on a postage stamp because of the frequent changes of rules, the late arrival of money and so on. Therefore to just say it was an underspend is unfair to the probation system, which was always working under considerable problems, put on it by NOMS, to enable it either to know how much money it had got or how it could spend it.
	As far as officers are concerned, the National Association of Probation Officers stated at the same time that, despite all the money that has been put in and all the extra probation service officers and bureaucrats, there has been a 9 per cent reduction in the number of probation officers. It is probation officers who should be dealing with people of the capability of Sonnex.
	My question reverts to particularly to David Scott, a very senior, highly regarded, widely respected person. The decision was taken that he should either be called upon to resign, or something else should happen. I think the Minister said in the Statement that this was some time between October when he submitted his report and February. Was the encouragement to resign given to him personally by the Secretary of State or by the chief executive of the National Offender Management Service, or was it left to some subordinate?

Lord Bach: My Lords, I recognise the expertise of the noble Lord in this field. Unfortunately, I do not know the answer to the direct question he asked me about how it came about that Mr Scott resigned. I accept that the remarks of Mr Scott are dignified, as he describes them, and it is no part of my function here today to make that position any worse.
	I know that there are genuine arguments about probation between the noble Lord and others and the Government, but some facts are indisputable: many resources have gone into probation over a number of years and the number of probation officers is higher. That there were considerable problems in London, and in particular in Greenwich and Lewisham, has to be acknowledged. However, sometimes the fault is not a lack of resources but is just managerial failure, and I think that that is what it was on this occasion.

Lord Richard: My Lords, I wonder whether my noble friend can help me on one main point. It seems to me that the two failures that caused this dreadful affair were, first, the one raised by the noble and learned Lord, Lord Lloyd, and, secondly, the granting of bail. I do not understand how bail was granted in this case and I should be very grateful if my noble friend could say what level of court granted it. Presumably probation officers were present and no doubt they gave the court information about Sonnex's previous convictions and offences. Perhaps the Crown Prosecution Service thought that it did not really matter because it knew that he would be rearrested as soon as he came out of court. Is that normal practice? If so, it seems to be extraordinarily dangerous. Finally—I think that what I am really asking here is something that I am not supposed to ask—once the application for bail had been made, why did the judge come to the conclusion that he did? I do not know whether my noble friend can help me on any of those matters.

Lord Bach: My Lords, I shall do my best but I cannot help my noble friend too much because, as the Statement said, in the end the granting of bail is inexplicable. It took place in the magistrates' court. I do not believe that the probation officer was present in court, but on that day there was communication between the probation officer and the Crown Prosecution Service, and so, as I understand it, the Crown Prosecution Service was aware that this man was wanted on licence. No doubt the defence solicitor made the application on the basis that this was a clearing-up exercise and that there was no point in remanding this man in custody for handling stolen goods when there were much bigger issues involving him, and therefore bail was given. I am in danger of employing guesswork, which I must be careful not to do, but I think that my noble friend and I can agree that the giving of bail was a dreadful mistake.

Baroness Falkner of Margravine: My Lords, there seems to be an inference that a lot of the problems were associated with the probation service, but I think that it is getting a slightly hard hearing because, looking at this in the round, it would appear that the failings went right across the board. Indeed, I would argue that some of them were strategic failings.
	The Minister has told us repeatedly that the underspend of the budget almost proves that the resources were not being managed, and that therefore the issue was not resources but the mistakes made in the system. I recall that in a debate on 14 May the noble Lord told us about the cuts that the Ministry of Justice had to make in this area. I reminded him that Napo says that some 50 per cent of the 400 probation officers being trained will not be given assignments at the end of their training later this year. Can the Minister tell us whether, looking forward, he is now reassessing the impact of those budget cuts on the caseload of the probation service, particularly when such junior people are given so much responsibility?

Lord Bach: My Lords, I agree with the noble Baroness. There were failings across the board, and I hope that neither I nor the Statement has suggested that they were purely down to the probation service. They were not; the failings, which led almost inevitably to this tragedy, were much more widespread than that.
	It is right that until now training has not always matched the number of jobs that are out there. However, I can tell the noble Baroness that the Government had planned to make a Statement about the future training of probation officers. As I understand it, it will be made tomorrow, although it may be delayed.

Lord Elystan-Morgan: My Lords, does the Minister not agree that there are two ways of approaching this terrible tragedy? One is to examine in detail each and every mistake and omission and to say, "There is the amalgam of coincidences that has brought about this outrageous situation". However, another way of approaching it is to look at the heart, core and kernel of the underlying situation, which, I suggest with great respect to the Minister, is one of resources. I understand that in the London probation area the average caseload for a probation officer is 90 cases, which is much too high. Secondly, as we heard, the officer in this case had been in post for nine months and was dealing with 127 cases. In the circumstances, it is not utterly unrealistic to say that this is not a resource matter? Although I appreciate that Her Majesty's Government have generously added to the budget of the probation service over the years, they have also generously added to the service's responsibilities on a massive scale. In the circumstances, will the Minister undertake to look at this central feature and to approach the issue directly and swiftly?

Lord Bach: My Lords, we maintain that resources were not the central issue here. Other high-performing areas had similar budget pressures, both inside and outside London, and they continued to deliver a much better service than that delivered by this area of Greenwich and Lewisham. Of course we take into account what the noble Lord says about the general issues concerning the probation service, but I think that we sometimes have to accept that disasters and tragedies of this kind happen because of managerial inefficiency and not just because there are insufficient resources. Here, we maintain that the amount of money that the London probation service and, in particular, the Greenwich and Lewisham probation service received was sufficient for them to do the work that was necessary. Unfortunately, that work was not well managed.

Business Rate Supplements Bill

Bill Main Page
	Copy of the Bill
	Explanatory Notes
	Amendments

Report

Clause 1 : Power to impose a BRS
	Amendment 1
	 Moved by Baroness Hamwee
	1: Clause 1, page 1, line 3, at beginning insert "Subject to the provision of section 4,"

Baroness Hamwee: My Lords, I welcome the noble Lord, Lord Davies of Oldham, who is a veritable and valiant Pooh-Bah, taking up this Bill at what I assume was very short notice. I should say almost in the same breath that I am very sorry that the noble Baroness, Lady Andrews, is not here to see it through this stage. She described the Bill as "pristine" when she first introduced it. We are hoping that it will become a little grubbier as we go through today.
	I should declare an interest as one of three joint presidents of London Councils. I was also a member of the London Assembly, part of the Greater London Authority, and the London Borough of Richmond upon Thames.
	As well as moving Amendment 1, I shall speak also to Amendments 6 to 9, 20, 21 and 25 to 28. Amendment 1 is a paving amendment and, I accept, not a very subtle one at that. This is the way we do things here. The noble Lord, Lord Bates, on behalf of the Conservative Benches, has put his name to all the amendments in this tranche. I am grateful for that. The Bill provides for a ballot if more than one third of the total cost of the project is to be raised from the business rate supplement or if the levying authority decides to hold a ballot. For us on these Benches—and, I believe, for all the Opposition—it is a point of principle that all those who are being asked to contribute should have their say, whatever the proportion of the BRS to the total cost of the project. Their view may, of course, not prevail—that is in the nature of voting—but they should be given the opportunity to exercise a vote. We are well aware that the Local Government Association is not enthusiastic about having a ballot in all cases. I suspect that this has something to do with a mixture of amour-propre and pride, confidence in how local authorities operate, and, no doubt, the cost of holding ballots. I explained in Committee that, although I would normally be heard to be supporting local authorities, that support is not without a critical approach. I believe in this case that the claim of the business organisations for a ballot and, more importantly, our own values and the strength of our own feeling about the necessity of allowing for a ballot should prevail.
	At the previous stage the Minister quoted the LGA's claim that no authority will make a decision that has a detrimental effect on its local business community. Of course not, but that is not quite an accurate description. No authority will make a decision which it thinks will have a detrimental effect on its local business community. But that is not the point. What is proper is that business should be able to express its view via a ballot and affect the outcome. Views will have been expressed before a ballot through consultation. The two stages of consultation and ballot are complementary, not alternative. The Minister defended the provision that there should be a compulsory ballot if one third of the costs are to be met by the BRS and said:
	"I would ask noble Lords to think about whether it would be right, democratic or fair that an entire project of some significance that was being marshalled by a balance of partners should be put in jeopardy due to uncertainty over a relatively small but critical element of a funding package. I would argue that it unbalances the partnership and introduces an avoidable degree of uncertainty. It is not worth taking that risk if the BRS is contributing only to a relatively small proportion of the overall funding package, which is one that would genuinely help business because it will be the test to be applied".
	A relatively small proportion which would genuinely help business? This is a top-down approach. I am sure that the noble Baroness, Lady Andrews, did not mean this. It quite honestly just dismisses businesses as not knowing what is good for them. It fails the test of what is right. She said that one third was "a fair point" because the business rates supplement is,
	"a smaller player in terms of the overall funding of a project".—[Official Report, 11/5/09; col. GC 329.]
	Whatever the proportion of the total cost, the effect on the individual ratepayer of that BRS will not vary.
	In the case of the other contributors to a project when there are a number of funders of a package, each contributor or investor will take a decision as to its own contribution—its loan or whatever it might be. In the case of BRS, it will be the local authority, not the ratepayers, which will take the decision about the "smaller contributions". The CBI and others have put forward arguments in support of a mandatory ballot on the basis of its practical benefits because business has better experience and understanding of investment than local authorities. They may have a point, but for us this is a matter of principle. Describing a mandatory ballot, as the Minister did in the Commons, as giving business a veto, is, as I have said before, offensive.
	I should make clear that the amendments would not bring Crossrail within the ballot provisions because of the amendment to Clause 27 agreed in Grand Committee. Crossrail is very different. It has been the subject of discussion, publicly available information and legislation over a long period, as has the contribution of businesses with a high rateable value.
	My amendments are not an attack on local government. If a local authority has the confidence to propose a project and put together a funding package, it should have the confidence that local business will support it. It will have to put it to local business if business is to contribute more than a third. After all, what is appropriate for BIDs is appropriate for the bigger schemes which are likely to be the subject of the business rate supplement. I beg to move.

Lord Bates: My Lords, I support this amendment and endorse the remarks so ably made by the noble Baroness, Lady Hamwee. I want to put on record our thanks to the noble Baroness, Lady Andrews, for the way in which she has conducted the negotiations and discussion, trying to keep us informed throughout this process. We have appreciated it and it has helped enormously, even if we have not always been able to agree. In that respect, I welcome the noble Lord, Lord Davies, to this part of the debate.
	We start with an issue which has been rightly identified as one of principle. The objective of the Business Rates Supplements Bill, we are led to believe, is to encourage a genuine partnership between business and local authorities. How can there be a genuine partnership if one argument is that business has a veto and the other is that local authorities have a veto about consulting with local businesses? The noble Baroness, Lady Hamwee, has already referred to a particularly interesting exchange in Committee when the noble Baroness, Lady Andrews, asked noble Lords to think about whether it would be right, democratic or fair to consult with businesses. That seems in many ways to give away the myth of what is going on here. What has been proposed is not really a partnership but a tax. Therefore, there is no desire to involve businesses in the decision.
	There is a problem with the notion of the threshold: where the proposal for a business rates supplement exceeds one-third of the total cost being put forward, that gives rise to a ballot. That leaves it open, given that there is such an arbitrary strike of where that boundary should fall, for local authorities to so manage their affairs in putting forward these proposals that a ballot does not actually take place. The simple way of starting off on the right footing towards making this a genuine partnership is to say that business involvement is essential from the outset. After all, if the objective of the business rate supplement is to promote economic regeneration, surely businesses will have nothing to fear from a referendum. All businesses will benefit from it. That is why business improvement districts work: because the people with a clear vested interest in an improvement in their area attracting more customers, more trade, must be totally signed up and committed. If the business rate supplement is genuinely additional, for economic regeneration in an area, and is crafted in a way focused on the needs of business, when business is invited to contribute to it, most businesses will want to support it. Therefore, why not test that opinion from the outset?
	The other benefit has been identified by the CBI in its helpful briefing on the clause. It states that it would deliver an improved relationship between local government and business from the outset—a point already made—and that it would mean better investment decisions, because businesses' experience would mean that only projects with demonstrable benefits to local economies would proceed. Again, that is a very important and valuable point. It would also enable levying authorities to have greater flexibility, because business communities are likely to accept greater flexibility in the knowledge that they will really be able to influence the final outcome. That is only fair when it will lead to firms paying higher taxes for projects—above and beyond what they already pay. The CBI states that that is not a business veto but a judgment about whether businesses actually expect to see value for money when they pay more tax in order to support a project. We very much support those sentiments on behalf of business. If the Government were to accept a compulsory ballot, that would be a clear way to settle down some of the sceptics about the Bill, because it would clearly state that it is a genuine partnership between business and the local community for the benefit of all concerned.
	My final point relates to the size of business involved. We are not talking about a ballot that involves hundreds of thousands of businesses in a local area. The threshold proposed is of a rateable value of £50,000. I am sure that the figures for central London will be higher, but outside London, that points to an office or retail space of between 3,500 and 4,000 square feet. There could be 35 to 40 people in there. In a given area, there will be relatively few of those businesses, but they will be a significant part of that local community and the local economy. The notion that they may somehow be excluded from decision-making and discussion—having a voice—on something to which they may be asked to contribute and which is notionally presented as for their benefit is unacceptable. I am therefore very happy to support the amendment and hope that it is secured.

Lord Jenkin of Roding: My Lords, I did not take part in the debate in Grand Committee. I have of course received the briefing from the Local Government Association suggesting that there should not be ballots in all cases. When I told someone who was arguing that there should be ballots in all cases that the Local Government Association does not want that, they gave the Mandy Rice-Davies answer: "Well, they would say that, wouldn't they?". That is the position I have come to. The argument advanced by the noble Baroness, Lady Hamwee, and my noble friend on the Front Bench is right as a matter of principle. There should be ballots in those circumstances.
	It is not enough for the local authority to say, "We believe that it is in the interest of the business community that we introduce these improvements and charge property holders and occupiers with more than £50,000 rateable value the business rate supplement to pay for it". They should go to those people to ask them, not just as a consultation but to say, "If you support this, do so in a ballot". If the majority both by value and by number of occupiers of votes yes—as it is put in the clause, if A is greater than B—it would go ahead. If more than a third are involved, there will have to be a ballot anyway, but where less than a third are involved, I think the authority should ask the occupiers in a ballot whether they approve of and will vote for it.
	That is the same principle—no doubt we will come to this later—as we had for business improvement districts. In the BIDs, there was always going to be a ballot of the occupiers. We now know that that can be extended in certain circumstances to the owners as well. The ballot was an essential part of that mechanism. So should it be in the business rate supplement.
	I support the amendments and I hope that, on reflection, the Government may feel able to accept them.

Earl Cathcart: My Lords, I declare an interest as a chartered accountant and as a director of companies that pay business rates, and I have been a councillor for more than 10 years, so on this amendment, I probably have a foot in each camp. I cannot see the logic of the Government's position in not giving businesses a vote in all instances. That seems to defy all logic.
	Last night, while listening to the European election results, I heard Harriet Harman saying time and again that the Government must listen to what the people are saying, that the Government must address their concerns. Here is the ideal opportunity for the Government to do just that. All business organisations are saying that there should be a vote in all instances where a business rate supplement is charged. In fact, most, if not all, submissions from lobby groups that I have received argue that there should be a vote in all instances. That is, except for the Local Government Association. As my noble friend Lord Jenkin has just said, "They would say that, wouldn't they?". If, as Harriet Harman says, the Government are going to listen to and address the concerns of business, this would be a good place to start. After all, the Government and the Prime Minister keep telling us that they want to support business. Here is their opportunity.
	The second piece of logic in the Government's position that I do not follow is that of consistency. The Government are prepared to give business a vote if its total contribution is greater than a third of the total cost of the project. I cannot follow the logic of not giving the vote below one-third. What is the significance of the percentage to businesses? None at all, really—a 2 per cent charge is a 2 per cent charge as far as business is concerned. In addition, as my noble friend Lord Jenkin just mentioned, the Government allow voting in all instances under the BID schemes, whatever the percentage contribution from businesses, so why not now with the business rate supplement? If the Government want to be consistent, they should allow voting in all instances for the business rate supplement, as they do for the BID schemes.
	The whole point of the Bill is to raise money for local infrastructure projects that will benefit local businesses. Local authorities are expected to work in partnership with local businesses. There will be consultation but, as the Bill stands, that can be ignored. Local government can press ahead with a pet project despite the wishes of businesses. Business may not consider that the local authority's chosen project is the right or best project for business in that area, but as things stand the local authority can override its wishes. What would concentrate the minds of local government is the knowledge that, at the end of the day, the project will be subject to a vote from the business community in all instances. It would also ensure that both parties really worked in partnership to ensure that the right project was selected.

Lord Brooke of Sutton Mandeville: My Lords, this is my first contribution to any stage of this Bill, so my remarks will be extremely brief. I represented a constituency in central London where, for many years before we reached the stage which we have now reached, and generally under the supervision of Mr Tony Travers, whom a number of noble Lords will known personally, I discussed the particular issues which we are embracing today.
	Since everything that could be said on this subject, other than perhaps what the Minister is about to say in reply, has already been said, I will not go on at length; I will simply rely on two things that have been said before but are very brief. Neither exactly matches the case we are dealing with, but their spirit certainly does. The first is the old saying that help is always better defined by the receiver than by the giver. The second is the remark by that great Ulsterman, CS Lewis, that if you hear about somebody going around doing good to others, you can always tell the others by their hunted look.

Lord Davies of Oldham: My Lords, I am grateful to all the noble Lords who have spoken in this debate and particularly grateful for the kind remarks about my noble friend Lady Andrews from the noble Baroness, Lady Hamwee, and the noble Lord, Lord Bates. I am sure we will miss the contributions of my noble friend, who worked so assiduously on these matters and with such great precision. No one will miss her more than me as far as the Bill is concerned. I will do my best to respond to the issues that were raised. I appreciate that these are matters of concern but I do not think that there is a huge difference between the Government's position and that of the noble Lords who have contributed to this debate. I give way to the noble Lord.

Lord Jenkin of Roding: My Lords, I apologise for intervening at such an early stage in the proceedings on this amendment, but the noble Lord said that we will all miss the noble Baroness, Lady Andrews. What has happened to her? Why is she not here?

Lord Davies of Oldham: My Lords, I am in some difficulty because no announcement has been made, but let me assure the House that my noble friend Lady Andrews will be fulfilling a role in the public service of great significance and she will, I have no doubt, in due course earn the commendations of the House on that fact. However, the announcement has not been made and that is why I am constrained. It was not clear just when the announcement would be made and therefore to my enormous joy I was drafted in over the course of Friday and the weekend to deal with the Bill. That is why I am delighted to be before the House now. If all the questions are going to be as difficult as the one the noble Lord, Lord Jenkin, has just addressed, I am going to have a very difficult time indeed. I hope I am not going to be so evasive on all the other points.
	I emphasise that, although I recognise that it is a key issue of the Bill, I do not think that there is a great deal of difference between the position adumbrated by noble Lords who have spoken and that of the Government. The issue is more a question of emphasis than one of principle. None of us thinks that businesses should not be involved in a BRS. We recognise that the policy will not work unless there is effective, constructive partnership between local government and businesses. The whole premise of this concept of any such project is based on that position. We have said that we of course expect levying authorities to engage with businesses early on in the development of any proposals and we would expect that dialogue to continue as the proposals are developed further. We are at one with the sentiment that is behind this amendment, that progress cannot be made unless business is involved in the development of the proposals and has a real say in these matters.
	How this happens, we believe, should be left to the levying authority to decide. We do not see the case for being overly prescriptive with regard to local authorities but we have strengthened the statutory guidance by encouraging levying authorities to think about how they will engage with businesses over and above the necessary statutory consultation which is already envisaged in the measure. By engaging in this way, the levying authorities will be able to gauge how businesses feel about the emerging proposals before they are complete and to reflect feedback from businesses as the project moves on towards that more formal consultation stage which is involved in the process.
	We should be able to leave local authorities to work responsibly with businesses to develop projects to benefit the economic development of the local area. It surely cannot be the case that the levying authority needs a ballot in every case. We have indicated that ballots are important where businesses are making a contribution above 33 per cent to the total position, but the approach we have adopted is that ballots must be proportionate and reasonable, bearing in mind that BRS revenues will contribute the lion's share of project funding in some cases. In other cases, it may well be that the business rate supplement is a very small part of the project envisaged. The fact that we are not requiring a ballot in all cases does not mean that this gives levying authorities carte blanche to bulldoze through their pet projects. Businesses will have a vote if they are involved in more than 33 per cent of the expenditure, levying authorities will be required formally to consult with businesses on top of any preparatory dialogue they have, and with all proposed projects they can be held to account if they fail to carry out this consultation.
	It is surely recognised that it is in authorities' best interests to ensure that they consult businesses effectively, but if I have followed the position which has been put forward by noble Lords—it was certainly the burden of the case put forward by the noble Lord, Lord Jenkin, and the noble Earl, Lord Cathcart—that even where the proportion to be funded is fairly small, the danger is that this would put undue emphasis on one aspect of a project. I accept the point that talk of a veto is somewhat excessive, but noble Lords will recognise that a ballot for business, when it may be contributing as little as 10 per cent, certainly puts very considerable emphasis on a contribution which is relatively marginal to it. We have guaranteed that the authorities will have already engaged with businesses that are contributing 10 or 15 per cent and the development of the project will have had the benefit of businesses' responses to the local authority consultation. I give way to the noble Lord.

Lord Bates: My Lords, I am grateful to the Minister for giving way. He says that 10 per cent or 5 per cent are small figures. Does he consider 30 per cent to be inconsequential?

Lord Davies of Oldham: My Lords, I do not, but a line has to be drawn somewhere. If the noble Lord concedes a contribution of 10 per cent ought not to occasion a ballot, then having listened to my careful arguments, he will not support the amendment before the House. If I say 33 per cent and he responds by saying that 32 per cent is only 1 per cent below and the ballot will be denied, logic dictates that one is faced with the same problem wherever the line is drawn. I merely indicate that there is a strong case for such a line to be drawn because where the contribution is relatively small, it cannot be logical or proper that local authorities which have carried out a consultation then have to go to ballot.
	The business rate supplement provides a new mechanism for local authorities to work with businesses on projects that will enhance the development of local areas. We want authorities to be innovative in their use of this new power provided that a link to economic development can be demonstrated. It is for the authority to decide the extent to which BRS revenues should be used to fund a project, but it is probable that BRS will feature as just one part of an overall funding package. Surely, therefore, a local project backed by a range of funding partners should not be put at risk because of the uncertainty surrounding what might be a relatively small contribution to the overall funding package. By the same token, we do not want unnecessarily to constrain levying authorities in their use of BRS; we want them to use this power flexibly. However, there is a real danger that financial institutions and funding partners will not be willing to commit themselves where business has a vote on an element, even a small element, of the overall project. In effect, the BRS would then be used where it forms the lion's share of the funding so that the whole project would stand or fall on the outcome of a ballot to which the funding partners do not have to be signed up. That is not what we are looking for. We want authorities to have a broader range and a degree of flexibility, and that is why we are against the constraints that would be imposed by ballots.
	We have provided many safeguards in the Bill for the interests of business, lest it be suggested that just because I am arguing about the universal ballot in this case, we do not have the interests of business at heart. A ballot on a scheme is necessary where the BRS provides more than one third of the funding, and an overall limit of 2p per pound of rateable value is established in the Bill. The BRS cannot be used to fund statutory services. It must be used for additional developments for the benefit of the economic development of an area. Mandatory consultation is required in all cases and we have provided that the details should be set out in a prospectus, including a cost-benefit analysis. So business has safeguards built into the legislation when it enters into consultation with a local authority about these possibilities. It is right that such safeguards have been included, but requiring a ballot in all cases runs the risk that projects will be put in jeopardy or that local communities will miss out on opportunities of enhancing areas because of the difficulty of securing broader financial backing for much-needed developments.
	I appreciate that the noble Baroness, Lady Hamwee, was somewhat guarded in her criticism of local authorities; indeed, all noble Lords who have spoken have shown some degree of respect for the position of local government. Local authorities are democratically elected bodies, so surely we should trust them to work responsibly with businesses on local projects and not shackle them with unnecessary requirements that are not needed given the other safeguards in the Bill. Accordingly, having listened to my case that this process will not work and opportunities will not be exploited unless local authorities work in close partnership with business, I hope that she will feel able to withdraw her amendment.

Baroness Hamwee: My Lords, I am grateful to all noble Lords who have taken part in the debate. I have to say to the noble Lord, Lord Davies of Oldham, that I did not think he was at all evasive in his response to the first question. I expected to hear that the noble Baroness, Lady Andrews, has a diplomatic sniffle, but apparently not. The noble Lord has been very honest and straightforward. He has been dealt a difficult—indeed, I think impossible—hand.
	I shall pick up on a few points. The noble Lord talked about the importance of engagement with the business community. A vote in a ballot is the greatest form of engagement and is complementary to a preceding consultation but different from it. He said that a ballot should be left to the levying authority and that the Government do not want to be overly prescriptive, so why put in anything at all about it; why pick on one third? He also said that if the BRS is a small proportion, the whole agony would be irrelevant. It would have to be a necessary part because of the extraordinarily stringent tests to prove additionality that we know about from the guidance fleshing out the statutory requirement for additionality which has been issued so far. He said that BRS would be relatively marginal, which I think is the same point. It may be proportionately small for a particular project, but it will not be marginal. By definition, it has to be important.
	The noble Lord said that banks might not be willing to fund if a project is dependent on a ballot. I cannot see banks being particularly happy if they know that there is going to be an uprising among the business community, with all the dangers that would present. He also said that we are showing a level of distrust of local authorities. That is simply not the point. As the noble Lord, Lord Jenkin, said, this is a point of principle. We are told that the line has to be drawn somewhere. I do not believe that there needs to be a line. I beg to test the opinion of the House.

Division on Amendment 1
	Contents 132; Not-Contents 125.
	Amendment 1 agreed.

Amendment 2
	 Moved by Baroness Hamwee
	2: Clause 1, page 1, line 7, at end insert—
	"(2A) Regulations may amend subsection (2) so as to add to or to vary the purpose of projects for which money may be raised by a BRS.
	(2B) The appropriate national authority shall consult the following on the draft of any regulations proposed to be made under subsection (2A)—
	(a) representatives or membership organisations of persons who are non-domestic ratepayers;
	(b) representatives of local authorities;
	(c) such other persons as the national authorities think appropriate."

Baroness Hamwee: My Lords, I beg to move Amendment 2 and shall speak to Amendments 5 and 29, which are grouped with it. As we discussed in the previous stage the Bill is, by definition, one for the long term. Amendment 2 would allow there to be variation in the purpose of projects to be funded by the business rate supplement. Under Clause 1, a project has to be one which the local authority,
	"is satisfied will promote economic development in its area".
	In the current climate, I accept that focus, although in Committee I think that we agreed on all sides that one could attribute almost anything to "economic development". Sir Michael Lyons himself, in the recommendations to his report, refers to,
	"the impact of the supplement on the local economy, and the potential economic benefits of the spending they"—
	the local authority—
	"propose to finance from the revenues generated".
	That is not quite the same thing.
	I would argue that environmental and social improvements in any event contribute to the economy of an area. When I was chairing the London Planning Advisory Committee—I think it was in about 1991—we commissioned some wide-ranging and deep research into the world-city status of London, and asked, "What makes a company decide to locate to a particular city?". The quite clear answer was quality of life, something very wide that clearly encompasses environmental and social aspects. Is it not rather arrogant of us to say that businesses are only interested in economic development in a narrow manner? I do not know, of course, whether the Government will seek to overturn the amendment that your Lordships have just agreed, but if we can retain the ballot it seems to answer the issue of what the statutory purpose of BRS should be. I am not proposing an immediate extension, but it would be dotty not to facilitate that extension if the mood or climate is such that it should be extended.
	My amendments are facets of the same issue. Amendment 2 would require consultation leading to regulations. Amendment 5 is one that we debated at the last stage, requiring,
	"a periodic review of the use of ... BRS",
	and that amendment has important provisions for representations to be made by anyone who is interested are. That amendment and what the review will report should come first, before any regulations provided for in Amendment 2. The Minister may tell us that such a review will happen in any event. The noble Baroness, Lady Andrews, whom I met last week to discuss this stage of the Bill, said that she was going to explain to your Lordships that, under other legislation, there would have to be a review. I hope that the Minister, if he is to pursue that line, can tell the House whether, on such a review, alterations to legislation can be made without more. I suspect not, which is why I am seeking, if not to require regulations, to allow for them.
	In the last stage, the noble Lord, Lord Best, had an amendment—promoted in that case by the Local Government Association—that would have allowed for the variation, if not necessarily the increase, of the 2p limit. Again, my Amendment 29 would require consultation to precede any regulations that provide for such a variation—and my argument about the ballot is obvious. If this legislation is to support Crossrail, which is its major aim, by definition it must apply for some decades. We believe that it should be flexible enough, with the safeguards that my amendments include, to cater for those decades, not just for the present.

Lord Graham of Edmonton: My Lords, I listened carefully to the noble Baroness, and I have no doubt that with an attachment, which I also have, to the London Councils she has taken fully into account its general support for these amendments. I have some sympathy with it, because it is pleading, over a long period, that the Bill needs to be a little more specific about precisely how consultation shall take place. Now, I know it is a common view in Committee that, as regards consultation, there should not be a long list of interested bodies that are entitled to be consulted. However, I would simply say thatLondon Councils clearly have a deep interest in this, not only from the point of view of the councils' size, stature and importance but because of their potential rate-levying powers.
	As regards Crossrail, which will be a long-time involvement, if it is not already clear in the Bill, it is not unreasonable to ask the Minister to explain to us the mechanism that the Government have in mind to provide bodies like the London Councils, and any others which have a big interest, with the methods and manner in which they can be consulted. These amendments are not talking about a prescriptive power to be placed in the Bill, but asking that due note be taken of the great importance. The Minister would also help the House and many outside if he could spend a little time on precisely how wide the raising of a business rate can go. In other words, will it be open to separate councils? Will it be more widely available than it appears to be in the Bill? The Minister could help the House and London Councils there.

Lord Bates: My Lords, I am sympathetic to at least some of these amendments. While beginning this process, at Second Reading and in Committee I put on record my interests as director of a number of businesses that pay business rates. I probably should have done that with the first group of amendments, for which I apologise; I certainly put that on the record now.
	On the amendments that we support, anything that improves communication and information on business rate supplements clearly has to be welcomed. We have a problem with Amendment 29, which contains the notion of varying the cap on the business rate supplement of 2 pence; we already think that a very high burden on business. I know that the Minister, in responding to the first group of amendments, made the point that potentially relatively small sums will be involved, but the Local Government Association has calculated that if every authority used the 2p levy, then the total tax take would be in the region of £750 million, and possibly even more than that in 2010 after the rating revaluation takes place. These are significant sums. It is in the nature of taxation that when someone applies an upper limit, there is a tendency to go up to that limit. One also needs to remember—I am sure that the Minister will want to make this point—that the figure is a maximum, not a minimum.
	There is an issue that we feel strongly about, and I want to put it on the record. The noble Baroness, Lady Hamwee, talked about what attracts businesses. Business rates are either the second or third biggest charge faced by most businesses, and we know from experience in the 1980s and 1990s, with initiatives such as enterprise zones and the like, that when you offer a business-rate-free zone, that becomes attractive to businesses. Given that business rates have a major impact on businesses locating in particular areas, we would have liked the Government to consider the notion, which we would have supported from these Benches, that funds from the levy could be used to discount business rate bills.
	There are various reasons why businesses might locate in a particular area. People might want to use the funds raised through the business rate supplement to discount the cost of business rates, which are an incredible burden on many businesses, particularly as a result of the increases that have already been levied this year. Although the 5 per cent increase has been deferred for a year, that additional 3 per cent will be levied on businesses next year. Next year there will also be the rating revaluation, so this is becoming a bigger issue.
	We would have thought that in those circumstances, being able to say to people, "Listen, you can raise funds through the business rate supplement and you can actually use them to discount the cost of locating and operating in your particular area" would be a sensible use of that facility. If the aim is to promote economic regeneration, we on this side of the House—and we would expect there to be some sympathy on the other side of the House, given the body of evidence for this—suggest that lower tax rates tend to stimulate exactly that. And if that is the aim, anything that lowers tax rates has to be a good thing.
	From that point of view, we are basically sympathetic to the spirit of these amendments, although in the case of Amendment 29 we would have serious reservations. If there were an additional level of flexibility, allowing it to be used to cut the excessive burden of business tax, we would be minded to support it more than we shall be.

Lord Best: My Lords, I moved amendments to similar effect in Committee and I support these, particularly those in Clause 14. I made the point on behalf of the Local Government Association, of which I am proud to be president, that although the level of 2p in the pound will raise a fairly large sum in pound terms, it will raise quite a small proportion of revenues for local government—something like 5 per cent of the money raised by the business rate alone, not 5 per cent of all the revenue raised for local authority spending. I see the supplement not so much as a tax burden as a collective means of paying for goods, services and projects that the local community wants. If this mechanism for raising money for important local projects turns out to be successful—we hope that eventually it will be, although we know that at present no local authorities are planning to move swiftly forward with these measures—it will be helpful if one does not need primary legislation to raise that amount of 2p in the pound to a higher sum at a later stage. The amendment would create something in advance of its requirement and well in advance of anyone wishing to share this load with the business community, and is helpfully trying to ensure that legislation puts it on the record now.

Lord Davies of Oldham: My Lords, I am grateful to all noble Lords who have spoken in this brief debate. I noticed one or two cross-currents in the debate: I heard the noble Lord, Lord Bates, say that he was broadly in favour of the spirit of the amendments, but he then produced some hefty reservations about Amendment 29 which I actually share. Noble Lords have argued, though, that there should be potential in the future to use BRS funds to invest in a wide range of community interests, which is what Amendment 2 seeks to do, rather than simply being limited to economic development, although, as noble Lords appreciate, "economic development" can cover quite a wide range of possibilities.
	It has always been the aim that the business rate supplement would be a pool that could be used to promote the economic development of local areas, hence the link to business rates as opposed to other forms of rating revenues. That is a clear theme that runs through the Government's subnational review, the White Paper that preceded this legislation and now the legislation itself. The link to economic development provides an important reassurance to local businesses that BRS will not be used to fund services that have little or no relation to them. BRS is intended as a tool that can be used to fund joint projects between local businesses and local authorities. It will be a means of raising additional revenue from businesses.
	I accept the point that the noble Lord, Lord Best, made: it is not a tax but the raising of funds for joint enterprise in which all wish to share and the outcome of which is meant to be for the benefit of the locality. It is logical that the BRS should be linked to the aspect of the local community that will be of most interest to local businesses, which is, inevitably, economic development. That is the premise behind the Bill.
	The concept of "economic development" is clearly understood. It has been explored in the subnational review and, subsequently, when appropriate implementation of the actions put forward by that review was being considered. We should not overlook the fact that the term "economic development" gives levying authorities and local businesses adequate scope for innovation, which is what we want to see from the Bill. Outside the core services that levying authorities should provide, BRS can be used flexibly and constructively to promote economic development in the local area. We did not limit the use of BRS to only one kind of project; instead, we have acknowledged that what is necessary will depend on the judgments of the local area, so there is considerable flexibility behind the concept of the legislation.
	Amendment 2 would risk distorting the unique purpose of BRS. Depending on the regulations laid under the amendment, BRS could be used on projects for aims more aligned to cleaner, greener or safer agendas which, while they would bring some indirect economic benefit, would not in the normal sense of the term be "central" to economic development, which is the thrust of the legislation. Of course businesses already contribute to the provision of services such as social services and street cleaning through the national business rate, but BRS is meant to be a new tool for raising revenue to invest in local areas over and above the provision of services and projects already provided. The Bill already provides local authorities, working with local businesses, flexibility in how they use these resources to tailor the project to maximise economic development for their local area.
	I agree with the sentiment behind Amendment 5. It is vital that legislation is reviewed so that if something is not working as well as we had hoped, identified and appropriate action can be taken. As the noble Baroness, Lady Hamwee, was generous enough to indicate, the Government are already committed to post-legislative scrutiny, so that all Acts must be reviewed between three and five years after Royal Assent. This requirement applies to all Acts that received Royal Assent during or after 2005, and this Bill when it becomes an Act will fall within that framework.
	The review will involve considerable activity on the part of the department submitting a memorandum to the relevant Commons departmental Select Committee. It will include a preliminary assessment of how the Act has worked in practice, relative to the objectives identified in the Bill. Following consideration of the memorandum, the Select Committee could then decide that a fuller post-legislative review of the Act was required, which would be carried out in the same way as other Select Committee inquiries. So we do not need an amendment to scrutinise Bills subsequent to their enactment.
	As I indicated, I did not think that the support of the noble Lord, Lord Bates, for Amendment 29 was whole-hearted and nor is mine. The amendment seems reasonable enough. It would allow the Secretary of State to vary the supplement's upper limit to reflect the state of the economy. During the good times, businesses might be expected to pay higher BRS than during a recession. However, the Bill needs to balance protecting the interests of business with the ability of levying authorities to raise meaningful sums of cash. The 2p limit strikes a balance between reassurance and meaningful practical application, bringing necessary resources forward. A set limit guarantees businesses the maximum that they can be expected to pay. If the amendment were accepted, businesses would no longer have the assurance of a maximum level, as the upper limit would potentially be subject to change over time. What about projects already under way? They might be subject to the potential for flexibility in resources available to them, increasing uncertainty. I therefore hope that the problems with that amendment are appreciated.
	My noble friend Lord Graham asked about consultation, which I dealt with in an earlier amendment. He will know that provision for statutory consultation is written into the Bill and how important that is. He is right: local authorities are the actors in this situation, which is why we need to make sure that they are fully apprised of their opportunities. However, we are going beyond that by producing additional guidance to strengthen consultation to ensure that local authorities know what their obligations and opportunities are and that they consult adequately with the interests whose support they need to attract. Inevitably, very important among those is the business community, because it is being asked to contribute the business rate. I want to give my noble friend reassurance on that score.
	These are interesting issues, which I know are being raised as part of a constructive approach to the opportunities that the legislation envisages, but we think that we have got the balance right. I hope that the noble Baroness now thinks that the Government have thought about these issues and that she can safely withdraw her amendment.

Baroness Hamwee: My Lords, the amendments are indeed intended to be constructive, and the Minister should read into them our support for the Bill generally. I understand the wariness of the noble Lord, Lord Bates, of Amendment 29. One is accustomed to hearing that rates can go up as well as down; in this case, they can go down as well as up—that is the point of the terminology.
	The noble Lord, Lord Best, expressed my intentions extremely well. I thank him and all other speakers for that. I say in response to the Minister that the ballot will be the safeguard.
	The Minister referred, as I knew that he would, to the statutory requirement for a review and post-legislative scrutiny. Can he refer us to the legislation which requires that? If he is not able to do it today, perhaps it could follow this debate—he nods at that. It does not, however, wholly answer my point, because, as I understand it, primary legislation will still be needed when there is post-legislative scrutiny, even if the scrutiny recommends the kind of changes that I am proposing.
	However, I am realistic enough to know what the government response to these amendments would be were we to win them when the Bill goes back to the Commons. I shall therefore pause while we are ahead on Amendment 5. I beg leave to withdraw the amendment.
	Amendment 2 withdrawn.
	Clause 2 : Levying authorities
	Amendment 3
	 Moved by Lord Bates
	3: Clause 2, page 1, line 17, leave out paragraphs (b) to (d)

Lord Bates: My Lords, I shall speak also to Amendments 4, 10, 14 and 38, standing in my name and that of my noble friend Lord Cathcart. The amendments highlight concern on this side of the House about the legislation full-stop. Our argument is that the legislation should have been restricted to London. It was designed and conceived as a mechanism for bridging the funding gap for Crossrail. Crossrail's £15.9 billion of funding was calculated, in negotiation no doubt with the Treasury, to include a business rate supplement in the region of £3.5 billion. We on this side of the House and the Mayor of London, whom we are happy to support in his ambitions for the capital city, see Crossrail as a major infrastructure project which should have been commissioned far earlier and desperately needs to go ahead. It requires some additional support from businesses. It was subject to debate during the mayoral election, where it was a principal part of a manifesto commitment. This legislation should therefore have been wrapped in, isolated and linked totally to the Crossrail project, because to move out beyond it looks suspiciously like an additional tax.
	A number of areas of government funding used to deal with economic regeneration and, to an extent, still do. The local authority business growth initiative, for example, provided about £1 billion per year to improve and stimulate economic regeneration in the many of the areas in which it is claimed the business rate supplement is now needed. That £1 billion over the past three years has been reduced to just £150 million over the next two years. We are already seeing the invisible hand of the Treasury at work, because, on the one hand, the local authority business growth incentive scheme is being wound down by an amount close to £850 million while, on the other, we see, miraculously, the business rate supplement being ratcheted up and rolled out more widely to provide potential funding of up to £750 million.
	This is a great concern that we have: when this particular measure was considered and conceived, it was in a wholly different economic environment and climate to the one that we are now in. Now, businesses up and down the country are struggling for breath to keep afloat in very testing economic times indeed. The business rates that are already there—whether it is non-domestic rate revaluations, the increase of 5 per cent, albeit spread over two years, congestion charging, parking charges; all of these taxes—stealth taxes—which were levied by the Chancellor to raise revenue from businesses during the good times are now very much the ones which are sinking many businesses, including other iniquitous taxes, such as empty property rates.
	This is in the same genre as empty property rates. It is one of these initiatives which were conceived in times of economic boom—so the Chancellor and the Prime Minister would have us believe—and are now being levied in times of bust in this country. Therefore, a very strong case is represented in these amendments, which we wish to pursue. This is a piece of legislation which should always have been linked to a specific, major, vitally important infrastructure project in the capital city and should not be levied outside it. I beg to move.

Baroness Hamwee: My Lords, I do not think that the noble Lord will be surprised that I am not with him on this one—as we were not in the Commons. Actually, I wrote against the first of his amendments, "So you don't support the Lyons review". I am not sure whether that is an entirely fair response—or perhaps it is a fair but incomplete response. We have made it clear throughout the debates on this Bill that we support the concept; were that not so, I would not have been seeking to extend the provisions of the Bill in the way that I just have.
	This is not just about London. One gets rather weary of people outside London thinking that those of us who live in this particular bubble are really only concerned about London. I do not want to be London-centric on this one. This Bill provides a mechanism which may not be used next week or next year by local authorities outside the capital—sadly it is not available to be used by the London boroughs because of the way this is constructed, but there we are—but a mechanism which I hope local authorities will find ways that perhaps none of us has thought of to use the BRS for the benefit both of their business community and their wider community. I think that the amendment goes against the whole concept of the Bill to confine it in the way that the noble Lord suggests.

Lord Brooke of Sutton Mandeville: My Lords, I shall be very brief. I hesitate to say this in the absence of the noble Baroness, Lady Andrews, whom I wish extremely well in whatever unknown circumstances she now is, but I recall, as the noble Baroness, Lady Hamwee, will recall, having attended the Committee and remaining stages of Bills over which the noble Baroness, Lady Andrews, presided, that at the time of the housing Bill, I allowed myself the comment on the very day that the Governor of the Bank of England was suggesting for the first time that there was a possibility that we might be in a recession, that those remarks sat somewhat forbiddingly over the optimism which the noble Baroness, Baroness Andrews, was expressing about the economy at the present time, and we returned to it later in one of the Bills this year. I do recall on that occasion that her defence of her position was that there was not a recession occurring at that moment.
	I entirely endorse, therefore, the remarks of my noble friend Lord Bates that in so many of these areas we are looking at legislation which was being carved out and conceived in much more favourable economic times than we are now enjoying, and it is a mistake if we carry on thinking that in fact all is going to be well, when at the moment there is still no dramatic evidence that that is so.

Lord Davies of Oldham: My Lords, if we constructed legislation on the basis of any immediate stage of the economy, we would have some very interesting legislation indeed. The noble Lord, Lord Brooke, will readily recognise that the process of legislation, from the initial concept to gestation and actual completion is a prolonged one. The idea that under normal circumstances one could cope with the vicissitudes in the economy is a little unrealistic.
	I recognise the point that he makes—that this Bill is about economic development and therefore that requires a degree of optimism. We are not going to deliver this Bill, nor are local authorities going to respond to this Bill, in the next three months; it will take time. It is right, as the noble Lord, Lord Bates, indicated, that the concept behind the Bill, the original concept, related to Crossrail—a very important project and a very important concept—which is at the heart of this Bill, but the Government would be failing in their duty if they did not, even in difficult circumstances, enact legislation that constructs opportunities for local authorities and for communities. After all, I hope noble Lords are not saying that, because there is a recession on at the present time, they have given up on every conceivable initiative in business, and that they cannot think of a single area in which any development or progress is being made. If they do suggest that, they have got a rather more blighted view of this recession than any economists I can think of. So I am not going to accept that; I am going to state that of course it is entirely right that the Government should be constructive about this legislation.
	Of course I respect the noble Lord, Lord Brooke, with his enormous commitment to the City of London, and I recognise therefore that he latches onto London-centric legislation in its genesis. I just remind the noble Lord, Lord Bates, if he did not notice, that I have endured over the past 24 hours the Conservatives extolling the fact that they have scored the largest number of votes in Wales. Here is a piece of legislation which relates to Wales in a constructive sense—and what is the stance of the Conservative Opposition? It is to say, "We do not think you should have any opportunities; the only opportunities are those which are reserved for London". That is a splendid way of rewarding the people of Wales for their, I hope, short-term perspective in which they have given some support to the Conservative Party. It will not take them long to learn the wisdom of their ways.
	I say this as far as this legislation is concerned. The legislation is enabling legislation: no local authority is compelled to take action. It is enabling. It gives local authorities the opportunity where a local development can take place—economic development in which business can play its part and wishes to play its part. That is the whole point about the necessary consultation and support. I maintain that even in the darkest days, it is still the case that enterprise shows its desire for opportunities. Local authorities should spend a great deal of their time concerned with enterprise, business development and economic development in their localities. They all ought to direct their attentions there, particularly in these difficult times, when we need to recover. This legislation will assist. That is why, on this occasion, I am asking the noble Lord, who has tried to persuade the Government of the virtues of the legislation, to withdraw the amendment.

Lord Bates: My Lords, I thank the Minister for his invitation. On the subject of Wales, the point which seems to be at odds here as we bask in our position of having secured the greatest popular vote for the Conservative Party in the Principality of Wales since 1918 is that—

Lord Brooke of Sutton Mandeville: My Lords, my noble friend should not ignore the fact that the last occasion on which the Conservative Party gained a majority of parliamentary seats in Wales was in 1859, exactly 150 years ago. It is therefore a very good omen for coming events.

Lord Bates: My Lords, my noble friend's grasp of history and his wit and insight are the things that we look forward to. I would add only this. The thing that will secure our position not only among the Welsh people but in the other parts of the country and also in the north of England is that we are protecting them from a tax increase. We reject the notion that the best way of advancing our newfound prominence in those regions outside London—in the south-west and in the north; in fact, it is difficult to think of a region where we did not make advances—is to levy a tax on those people, when there are many other vehicles by which that economic regeneration could be happening. For example, there is the money going from the central Exchequer into the regional development agencies. There is the business rates levy. There are business improvement districts. There is a local authority business growth initiative. Business taxes many and plenty are being levied to promote economic regeneration, which is desperately needed at this time.
	I found the Minister's response less than convincing. As such, I should like to test the opinion of the House on this issue.

Division on Amendment 3
	Contents 59; Not-Contents 122.
	Amendment 3 disagreed.

Clause 3 : Use of money raised by a BRS
	Amendment 4 not moved.
	Amendment 5 not moved.
	Clause 4 : Conditions for imposing a BRS
	Amendments 6 to 9
	 Moved by Baroness Hamwee
	6: Clause 4, page 3, line 25, leave out "where there is to be"
	7: Clause 4, page 3, line 25, after first "ballot" insert "has been held of the relevant persons"
	8: Clause 4, page 3, line 25, leave out "the ballot has been held"
	9: Clause 4, page 3, line 26, after "approved" insert "by a majority as set out in section 8"
	Amendments 6 to 9 agreed.
	Clause 5 : Prospectus
	Amendment 10 not moved.
	Amendment 11
	 Moved by Baroness Hamwee
	11: Clause 5, page 3, line 37, after "prospectus" insert "and a summary of it together with an easily understood explanation"

Baroness Hamwee: My Lords, I will speak also to Amendments 12 and 13. The amendments are retabled from Committee with an addition inspired by the noble Lord, Lord Bates, which I will come to in a moment.
	They are mild little amendments, and I have been very surprised at the resistance that the Government have shown to them. They simply provide that, under Clause 5, when prospectuses are published, either in hard copy or electronically, they should be accompanied by a summary and what I have described as an "easily understood explanation". This was inspired by the noble Lord, Lord Bates, who said that it would be sensible if local authorities produced FAQs—frequently asked questions—and their answers. I thought that the PPO might have a seizure if I used the term "FAQs" in an amendment, so this longer group of words is the synonym.
	Amendment 13 provides that copies should be made available not only at the principal office of the levying authority—that would be City Hall in the case of London, county halls elsewhere—but also locally at the principal offices of the relevant billing authorities. In London, this would be at the main offices of the London boroughs. In other areas, it would be the district offices.
	The Minister at the previous stage said that the Government did not want to overprescribe, and in general we support that. However, the Bill must look first to the interests of the consumer—the ratepayer. The arguments against these amendments in the Commons were not persuasive, and our Minister, if I may put it that way, had to defend something that was not only indefensible but frankly not worth defending. The reference to summaries is included because the prospectus will be a technical and probably pretty heavyweight document, and should be accompanied by something that is short and with which ratepayers can get to grips without difficulty.
	The third amendment concerns its availability more locally. It will still not be available in many places. There will be the web—I dare say that most businesses liable to the BRS will naturally look to the web for information. However, if a hard copy is required—and the Government seem to think it is, because they are providing for hard copies—its availability should be more local than the Government seem to think is necessary. It really is a token gesture to have a hard copy available at the principal office of the levying authority, given the distances that in most cases would have to be travelled.
	These are modest and mild amendments. It is beyond me to understand why they have provoked such resistance. I beg to move.

Lord Bates: My Lords, I am delighted to support the amendments. I do not have a great deal to add to the words of the noble Baroness, Lady Hamwee. However, I will make a few points about easily understood explanations.
	The amendments take on a new significance in the light of Amendment 1, which has been passed, because we now hope to find that businesses will be asked their opinion on all of the schemes that are put forward. Therefore, they will need an easily understood explanation. The discussion in Committee was well informed, contained lots of ideas and was genuinely constructive in coming forward with proposals. The point was made that, in tough economic times, officials in government departments, and even officials in local authorities, may have the time to construct, read and digest the implications of a 100, 200 or 300-page document and prospectus, complete with various legal and contractual requirements and the financial statements that will be there alongside the details of the scheme. However, if you are a business person who is struggling to make ends meet and to get through very difficult times, you are unlikely to want to print off 300 pages and read through them. Therefore, the requirement to provide a succinct summary that communicates the essential elements of the proposal seems to us an eminently sensible idea which most people would support.
	When we discussed this in Committee, the noble Baroness, Lady Andrews, gave as one of her arguments for not accepting the proposal the desire not to prescribe to local authorities how they should conduct this whole process of communicating with business rate supplement payers. However, Clause 5, headed "Prospectus", contains several statements about what should be contained in the prospectus and how it should be presented. It states that electronic copies should be provided on the website and that a levying authority should,
	"make copies of the published prospectus available for inspection at its principal office at all reasonable times of the day".
	That is quite a micro-level of stipulation as regards what should happen with the prospectus. Therefore, I do not think that the Government's arguments as presented in Committee stand up to careful scrutiny. These are very sensible amendments. I should have thought that if the Government want to ensure that these business rate supplement schemes are successful, the best way to do so is to ensure that people have the right information in the right proportion which answers the questions about which they are concerned. I should have thought the Government would want to accept these amendments in a sense of enlightened self-interest rather than refuse them. They are perfectly reasonable amendments and I am very happy to support them.

Lord Davies of Oldham: My Lords, I am grateful to noble Lords who have spoken in this brief debate. Of course, the Government wholeheartedly support the principle behind this group of amendments; namely, that levying authorities' prospectuses must be easily available and clearly understood. As my noble friend set out in Committee, the Bill contains a minimum framework of requirements on levying authorities in terms of their prospectuses to leave room to make the right arrangements locally. We continue to believe that this is the right approach but nevertheless we have no hesitation in subscribing exactly to the principles that the noble Baroness and the noble Lord emphasised in speaking to these amendments. We continue to believe that it is right that the Bill sets down a minimum standard. We undertake to review all the debates, including this one, which is an important contribution. We had an extensive debate in Committee and these issues were also debated in the other place. We will look at all those debates and at the representations we have received on the issue and consider the guidance which should be given to authorities under the Bill about the responsibilities to which they must have regard in relation to their prospectuses. I hope that the noble Baroness will accept that we have responded as positively as we can to the points that she made, and that she will feel content to withdraw the amendment.

Baroness Hamwee: My Lords, it must be such a difficult job being a parliamentary drafts person, and a Minister defending a draft and not wanting to have the ignominy of giving way, even on a little point such as this. I suppose that I have been there in another life. That is a pity but I am very grateful to know that guidance should extend to this. The noble Lord did not quite confirm that but said that the Government would look at the points. This is not a party political point. I am not trying to cause the Government to fall over it. It is simply common sense, but common sense also tells me that I had better beg leave to withdraw the amendment.
	Amendment 11 withdrawn.
	Amendments 12 to 14 not moved.
	Schedule 1 : Information to be included in a prospectus for a BRS
	Amendment 15
	 Moved by Baroness Hamwee
	15: Schedule 1, page 21, line 11, at end insert—
	"The authority's estimate of the costs of maintaining and operating the project and how they are to be funded."

Baroness Hamwee: I wish to speak also to Amendments 17 and 18 standing in my name in this group. Amendment No. 16A in the group stands in the name of the noble Lord, Lord Bates.
	These amendments deal with the contents of the prospectus in Schedule 1. Amendment 15 would require the inclusion in the prospectus of information about the costs of maintaining and operating the project and the funding of that. These are important matters for rate payers. They are likely to want that information in order to assess the project. Their assessment of its viability must extend beyond simply, in the case of a capital project, something material and concrete—I do not necessarily mean that literally—to something beyond the construction of it. A project will not work unless its operation has been thought through. Paragraph 3 of Schedule 1 says that the prospectus must include:
	"A description of any work"
	which the local authority has undertaken on the feasibility of the project. This amendment would require that work to be undertaken. Paragraph 5 deals with the authority's assessment of the impact of the BRS, its benefits and the relationship between the information given about the impact and the benefits. However, these assessments do not extend as far as the provisions of my amendments; they do not quite cover the issue. In Grand Committee, the Minister said that if the levying authority plans to use the BRS for maintenance and operation, it will need to set that out in the prospectus. I accept that but that is not the point of my amendments and is not what I am driving at here.
	Amendment 17 would provide for an explanation of the proposed project management—something that I think most businesses would be interested in—and of how the project, when completed, is to be managed and its governance arrangements. The amendment that I tabled in Grand Committee was obviously not sufficiently clear as it was answered as if I was proposing that there would always be a special purpose vehicle. I am not proposing that. Sub-paragraph (b) of Amendment 17 states:
	"the governance and management ... (if any dedicated arrangements)".
	Amendment 18 states:
	"A description of the arrangements to ... keep ratepayers informed ... and to enable them to make representations to the authority".
	The arrangements about making representations are crucial and would be a significant addition. A good local authority will allow that anyway. This is more than can be covered by guidance about the provision of information. Making representations and allowing for them have different requirements.
	The noble Lord, Lord Bates, will speak to Amendment 16A. I am flattered by the replication of some of my terminology, but not quite flattered enough to be able to support the requirement for the representation of ratepayers on the governing body. That is not appropriate. At the previous stage I likened ratepayers to shareholders. I accept that shareholders vote on who is on the board and can make representations. In this model, one would expect that, if investors or third parties are involved, they would have contractual rights but would not be part of running the show unless that is part of the deal that they have made to give the loan, or whatever form their investment might take.
	I also wonder whether it would be possible for an individual to act as a representative, or even a delegate, of all businesses in the area. I hope that the noble Lord can cover this. There will be quite a range of interests concerned and this will not be easy. Indeed, it may have the seeds of something a little dangerous if one is persuaded that, by this sort of arrangement, the interests of ratepayers can be hived off in some way and represented by a board member, or even two board members. The interests of ratepayers should run through all decisions and not be regarded as something tacked on, with lip service paid to them. I beg to move.

Lord Bates: My Lords, I support the amendments that have been spoken to by the noble Baroness, Lady Hamwee, and will speak to Amendment 16A, which is in my name and that of my noble friend Lord Cathcart. I will deal with the broad principle of what we are looking at here. Having businesses involved in the process from beginning to end, at every stage—and not only in the consultation process, which will take place before a ballot of businesses—is important for two or three reasons.
	First, it is just good practice for people to contribute to the scheme. The Minister referred to giving comfort to banks if capital-raising was involved in the scheme. The banks might take comfort from various aspects of the difficulties involved in raising additional funds. I would have thought that the banks would certainly be comforted to see strong representation on the board of the body—whether it is a committee or council—of the business community. This shows that it is not just paying lip service and that they are there not only as token representation but to give meaningful input. The business community brings great expertise in the whole area of financial management, project management and procurement. If the objective of this legislation is economic regeneration, as the Government keep reinforcing, surely there are no better people to articulate what will work in improving the business environment than the businesses themselves. We would like to see that.
	We had a detailed debate on this in Committee. Several points were raised. Essentially, they distilled down to the purpose of this amendment. The Minister gave pretty categorical assurances, as the record will show, that there would be absolutely no question but that businesses would be expected to be involved from start to finish. She reiterated at col. GC 521 on 18 May 2009 that this was the case. Her expectation was that businesses would be involved at every stage. Our response was, perhaps, a fraction prescient. We said that, although a clear assurance was given by the Minister at the time and she is absolutely trustworthy on these matters, Ministers move from time to time, at the behest of the Prime Minister and to other opportunities in government. Therefore, one of the advantages of having such a provision in the Bill is that it will give some continuity. In many ways, that concern has been reinforced in light of the events that we have heard about.
	Amendment 16A recommends two things. First, it mentions accounts being made available for the project as a whole and to keep the budget in check. That would be sensible. Those elements are really the only two that add anything to the amendments that have been tabled by the noble Baroness, Lady Hamwee. As well as the financial statements, it recommends representation on the board, which should be regarded as entirely helpful. It is something that, in Committee, the Minister gave the warmest possible support to, in principle. Perhaps, when the Minister responds, he will make similar warm noises. I am afraid that for the reasons I have outlined, the structure for the engagement of the business community in the project throughout is so important that it should be in the Bill, and I give notice that if the Minister's response to Amendment 16A proves unsatisfactory, I will test the opinion of the House.

Lord Davies of Oldham: My Lords, I am grateful to both noble Lords for moving and speaking to their amendments. The noble Lord, Lord Bates, indicated how strongly he feels by suggesting a possible Division of the House on his amendment and I hope that I can assuage his anxieties on that score.
	We have considerable sympathy with the sentiments of both noble Lords. The issue is whether the Bill needs to be amended to give effect to their points. The Government have thought seriously about these issues and the way in which we envisage the legislation being enacted meets noble Lords' points. Of course levying authorities will need a wide range of information in the economic assessment of their proposals to be included in their BRS prospectuses. I am happy to put it on record that we expect that assessment to include consideration of the long-term viability of projects—something that businesses will be and should be only too ready to press authorities on. It cannot be expected that businesses conduct themselves without being reassured about the viability of the project and its longevity. I can also reassure noble Lords that ongoing running costs will, under the guidance which we have issued, be included in the assessment of total project costs for the purposes of determining whether a ballot is required. Business will be fully informed on that front. I want to provide reassurance on Amendment 15 in those terms.
	Amendment 16A, to which the noble Lord spoke, and Amendments 17 and 18, which revolve around the same areas, require the levying authority to set out in the BRS prospectus the proposed management arrangements for a project's lifetime, and for when it has been completed. It is crucial that businesses feel that they can have confidence in the running of the project, but I do not consider the amendments to be necessary to provide this assurance. In fact, the amendments are overly restrictive and do not reflect the fact that each BRS is likely to be unique. After all, we considered an amendment a moment ago which sought to restrict the BRS to London and Crossrail. The noble Lord thinks that the BRS has unique factors. In fact, he would have restricted it to one feature. No, we want the BRS to be more available than in that example, as I indicated in my response to the proposal at that time. However, we recognise that each BRS is likely to be unique and, therefore, it is difficult to be prescriptive about what information is required in quite the way that the noble Lord and the noble Baroness suggest.
	The use of the BRS is likely to vary in terms of the type of project that the supplement will fund and the proportion that the BRS will contribute towards the total cost of the project. Requiring levying authorities to set out the proposed governance arrangements, once a project is completed, appears to assume that the BRS will always be used to fund, or part fund, infrastructure projects. However, in some cases, it is important that infrastructure built by use of the BRS be maintained. There is no point in building the infrastructure in the first place if there is no maintenance in the long run. That is the burden of the noble Lord's anxiety. However, we envisage that the BRS may be used for entirely different projects, including revenue projects and for training. They may not necessarily have a legacy that involves ongoing project management and governance arrangements. Why should we be so prescriptive that local authorities can undertake with business partners only a narrow range of projects? Surely we want to make this Bill succeed and to give some flexibility on that front.
	Therefore, determining what, if anything, will be the ongoing needs for the management of the project can be decided only on a case-by-case basis. We need to provide levying authorities with the ability to respond flexibly to the needs of individual projects and that is why we have eschewed the concept of being overly prescriptive in the legislation. I hope that noble Lords opposite who have moved and spoken to their amendments in good faith—I respect their concerns about these issues—will also respect the Government's position and why we need to preserve flexibility.
	The BRS prospectus will make it clear how those paying the supplement can expect to be kept informed about how much revenue has been raised in the BRS and how it has been spent. Paragraph 11 of Schedule 1 requires levying authorities to make it clear in their prospectus how those liable for the supplement will be informed about the expenditure incurred on a BRS project. The obligations on the levying authorities are quite clear, therefore, and we have them in the legislation.
	Local businesses will also understand how they will be kept abreast of the progress being made. We intend to ensure that, which is what the amendments seek. We are fully seized of the necessities that the noble Lords have suggested. The fact that the arrangements will be set out in the prospectus provides local businesses with an opportunity to give feedback on the proposed arrangements for sharing information about the progress of the project.
	We expect that successful BRS projects will be developed in partnerships. That is the best guarantee of the flow of information between the partners and that all those who are playing their part are fully apprised of what is involved. The appropriate level of managerial involvement with any project will depend on the specific circumstances of each individual project. To attempt to control the Government's arrangements could lead to an overemphasis on the BRS aspects of a project. This could result in other aspects of project government related to other funding streams not being as good as they might be.
	I understand the concerns. It is not that the Government have not thought about these issues very seriously indeed. We want, however, to avoid overprescription and, although I cannot agree with the amendments because I believe that the Bill makes adequate provision, I agree with the logic and principles underpinning them. The Government intend to signal in guidance that levying authorities should clearly share their information in an open, timely and clear manner throughout the project and consider the right role for business in the delivery of the project. These, after all, are based upon partnership and business will in many instances have a crucial role in governance. I do not think, however, that in legislation which covers a range of projects which we cannot foresee in detail and which might embrace a range of concepts, we can or ought to be prescriptive. I hope that the noble Baroness will therefore consider that she can safely withdraw her amendment.

Earl Cathcart: My Lords, before the Minister sits down, I am not sure whether he addressed proposed sub-paragraph (d) of Amendment 16A, which refers to,
	"those paying BRS to be represented upon the governing body of any organisation set up for the purposes of delivering the objectives of the BRS".

Lord Davies of Oldham: Projects will vary. That will inevitably be the case in most projects we can envisage because it is quite clear that businesses will have an interest in the management. They will have a right to leadership in the management. After all, they will be making a contribution, and we would expect that to be the case. We are asking the noble Lord to accept that if we are prescriptive in the Bill, we will set up a particular form of management structure which may not obtain in all cases, particularly as we are not prescriptive about the level of contribution that the BRS might make to the overall project. The moment we get into any attempt at definition of participation in that formal sense, therefore, we are involved in being prescriptive in a way which the Government seek to avoid. It is not because we cannot see how partnerships could develop without a recognition of the role of governance in most cases, but if we put it in the Bill, we have to cover every case in circumstances where a wide variety of projects is likely to be put into effect.

Baroness Hamwee: My Lords, I am obviously glad to hear about guidance. With regard to my Amendment 15 about the costs of maintenance and operation, any authority with its wits about it will include that information and take the consequences by way of the businesses' response if it does not.
	I was seeking hard to preserve flexibility, which is why my Amendment 17 refers to,
	"arrangements (if any dedicated arrangements),
	and to reflect the case-by-case nature of these arrangements, to which the noble Lord has alluded. I am certainly not envisaging the BRS funding only capital construction. The noble Lord said that capital programmes would not be embarked upon without the maintenance being thought through. Oh dear, I do wish that were the case but sadly that is not always so.
	According to my reading, the schedule is not sufficiently extensive to cover the points that I have made. I do not want to use the word "nannying" but the noble Lord was very protective of the amount of work that ratepayers would have to do in getting to grips with the prospectus and he urged me not to add to it. However, I think that the prospectus will inevitably be complex—it will not be adequate for its purpose if it is not.
	As regards the amendment of the noble Lord, Lord Bates, although he did not directly answer my question about whether one or two individuals could represent all businesses, I think that the implicit answer to my question was, "Yes, they can". The noble Lord is nodding and that is on the record. I am interested in the Minister's response. He castigates the noble Lord for envisaging only a single governance model, but the noble Lord's amendment—I am arguing against myself here—refers to the,
	"governing body of any organisation".
	It does not say "the organisation" but "any organisation". It then goes on to talk about being involved in the oversight of the delivery. I leapt to the defence of the noble Lord's drafting but I do not agree with the underlying concept, which is a pity because I obviously agree with other bits of the amendment. Therefore, if he divides the House on it, although I hate doing this, I think that we have little option, as we would like to go a bit one way and a bit the other, but to stay put. However, I hear what the noble Lord says on my Amendment 15 and I beg leave to withdraw it.
	Amendment 15 withdrawn.
	Amendment 16
	 Moved by Lord Jenkin of Roding
	16: Schedule 1, page 21, line 18, at end insert—
	"(d) the likely impact of the imposition of a BRS on those contributions towards funding public transport works that are treated as allowable deductions.
	In this Schedule—
	"public transport works" means works undertaken to provide services on which members of the public rely for getting them from place to place when not relying on facilities of their own;
	"allowable deductions" means expense occurred in the course of carrying on a business under Schedule A or Schedule D (Cases I and II) of the charge to tax under the Income and Corporation Taxes Act 1988 (c. 1)."

Lord Jenkin of Roding: My Lords, noble Lords who took part in the Grand Committee will recognise that this is the same amendment that was tabled then—on that occasion by my noble friend Lord Brooke, and I added my name to it. In the event, my noble friend was unable to move it and I did so myself.
	I tabled the amendment again late on Thursday, shortly before five o'clock, because I was expecting to receive a letter from the noble Baroness, Lady Andrews. It had been promised by her private office but by a quarter to five it had not arrived and, as the noble Lord will be aware, the rules of the House require that if this amendment was to appear in the first Marshalled List to be published on Friday, I had to get it in before five o'clock. That is the only reason that I tabled it—it was due to the circumstances. However, I subsequently received the letter and, having read it, I am extremely glad that I retabled the amendment. The letter was very unsatisfactory, as I shall explain in a moment, and I think that we need an opportunity to examine the matter further.
	The amendment seeks to clarify the extent to which a voluntary financial contribution made by a business to infrastructure schemes is tax deductible as the business expands under the Income and Corporation Taxes Act 1988. As I explained in Committee, this amendment is primarily aimed at the Crossrail project, which has long been supported by the City of London Corporation and for which the City agreed, as part of the overall financing mechanism for Crossrail, to seek voluntary contributions from businesses totalling £150 million. At the Second Reading of the Crossrail Bill, I asked the Minister what would happen if that money did not come in. I did not get a very satisfactory answer. This is in addition to the £200 million which the City agreed to provide from its own resources. As noble Lords will realise, the readiness of any business to make a voluntary contribution of this kind would be substantially influenced by their expectation—if they had an expectation—that it would be tax deductible.
	When we debated the amendment in Committee, the Minister confirmed that business rates supplements anticipated by this Bill would be treated as business expenses and, therefore, would be deductible. The position of additional voluntary financial contributions, which are, of course, also supplementary to the rates which businesses pay, was something which the noble Baroness quite reasonably wished to reflect on in consultation with Her Majesty's Revenue and Customs. It was that which gave rise to the undertaking to write before Report.
	I will now refer to the letter, which a number of noble Lords have also seen. It starts by making two perfectly reasonable points. First, it points out that the question of deductibility cannot be pronounced on as a generality because the position is complicated. Individual business circumstances will vary and any question of deductibility has to therefore be determined in relation to an individual business's circumstance. Secondly, it points out—again quite properly—that, other than for capital expenditure, the test is whether the expenditure is incurred,
	"wholly and exclusively for the purpose of the business".
	Having set out that background and specifically referred to the question of deductibility as being dependent on the circumstances and not amenable to a general assertion, the letter goes on to make a general assertion, albeit hedged:
	"Therefore, whilst I am advised that it is impossible to give a definitive answer in general terms rather than on a case by case basis, it remains unlikely that a voluntary contribution would be tax deductible".
	I find that a surprising conclusion and I think we deserve a further explanation. It may be that HMRC—I was a Treasury Minister responsible for the Inland Revenue when it was a separate department—mindful of the precedent which might be claimed to have been set, has advised in generality and not by reference to Crossrail—in which case, perhaps one can understand that rather sweeping statement. But this amendment is aimed specifically at the very special Crossrail scheme, which was the subject of a government hybrid Bill which took a number of years to get through Parliament but eventually reached the statute book. There is a wide measure of agreement that the scheme is essential in order to improve and enhance the transport of people in and around London—not just on the line of the rail but over a much wider area. Of course, it is widely agreed by business in London because of the advantages that that extra mobility will bring to the conduct of business.
	In ordinary circumstances, I can understand why businesses would not contemplate making voluntary contributions to a scheme of that sort. It is not in the nature of businesses to do that. They may make charitable contributions. They may decide to offer a bonus to their staff—out of the goodness of their heart, as it were. Charitable contributions will have certain tax consequences, and bonuses are certainly tax deductible, because they are clearly seen to be incurred for the benefit of the business. Businesses are already earmarked for a business rate supplement, which the London mayor will be entitled to levy under the Bill, and the proceeds of that will be going to Crossrail.
	There is a Treasury paper on that, to which I drew the attention of the noble Baroness, Lady Andrews. She was not aware of it at the time, but no doubt she went back to ask, "Why haven't I been shown this?". It is a Treasury document on business rate supplement guidance, published last month. Paragraph 2.1 is interesting. It states:
	"There are a number of funding mechanisms available that enable local authorities and their communities to raise revenue locally to invest in the local area, for example Business Improvement Districts"—
	to which we will come later—
	"and the Community Infrastructure Levy".
	It is now nine months since the Planning Bill reached the statute book. What has happened to the community infrastructure levy? It was contained in Part 11 of the Planning Act. We were supposed to have had regulations. Nothing has been heard of it since. I have been postponing meetings with local authorities because they tell me, "We know no more about it than you do". Perhaps we might have an answer on that.
	Business improvement district contributions are deductible. The community infrastructure levy, in so far as it is a revenue payment, as it may be in some circumstances, will be deductible. One therefore has to ask why a voluntary contribution of the sort being made to Crossrail is not also deductible. After all, in making such a voluntary contribution, business is at the same time making a robust statement about the importance of the project for its own business interests.
	Therefore, I am quite unclear why, at least prima facie, voluntary contributions should not be regarded as wholly and exclusively for the purposes of the business. As the noble Baroness said, I understand that this is not straightforward, but we are entitled to a fuller explanation of why the Inland Revenue seems to take the view that,
	"it remains unlikely that a voluntary contribution would be tax deductible".
	We ought to have that explanation before Third Reading. I well understand if the noble Lord is unable to give us that assurance today. I leave him with this thought. A BID payment is tax deductible, as I said a few minutes ago. A BID payment is, in a sense, a voluntary payment, because it must be voted on. There has to be a vote of all the businesses that will be liable, so it has very much the characteristic of a voluntary payment. Why, therefore, are voluntary payments made to a project of the enormous importance to London of Crossrail not, at least prime facie, tax deductible? I beg to move.

Lord Brooke of Sutton Mandeville: My Lords, like my noble friend, I was once a Treasury Minister. It is 22 years since I gave up being the Minister responsible to Parliament for Customs and Excise, long before the marriage of Customs and Excise with the Inland Revenue in their new and present form as HMRC. I mention this because, as my noble friend Lord Jenkin said, the guts of this matter is the attitude of HMRC as expressed in the letter to which my noble friend has alluded, which has come from the noble Baroness, Lady Andrews, arising out of Committee. I recognise that she was being guided by HMRC, and I share my noble friend's regret that the Government's position is as the letter he referred to implied. I appreciate that HMRC has to interpret the legislation that it is asked to enforce, and the legislation is our responsibility in Parliament.
	In the circumstances of Crossrail, which underlay my noble friend's contribution in Committee and today, I hope that sensitive interpretation, in terms of the case-by-case formula, will apply, and I will briefly enlarge on that hope. To go back to those days when Inland Revenue and Customs and Excise were separate, some identified the difference between them in their character as revenue departments. The difference was that Inland Revenue was preoccupied with the precise letter of the law, while Customs and Excise, in dealing with business, was capable of taking a broader view and of seeking to maximise revenue by simplifying procedures more roughly and readily on the time-honoured grounds that the best deal in business is one which is good for both sides.
	I left my responsibilities for Customs and Excise two precise centuries after Pitt the Younger invented the Consolidated Fund and simultaneously slashed excise duties in a manner which dramatically raised the proceeds from the duties which remained, because of course smuggling disappeared overnight. Of course, I recognise that deductibility will involve a subsidy from HMRC, but common sense sends us back to Pitt. Crossrail, as my noble friend alluded, is going to need all the help it can get to make sure that it actually has the funds to carry out this enormous project. I have composed my notes for this speech around a draft of the speech which my noble friend has just delivered, so I have to pause for a moment while I recover my place.
	If non-deductibility prevails, there is the risk that voluntary contributions will not come in. If, however, the response is sensitive, the chances improve that business will support the obvious arguments that exist for Crossrail and put their hands in their pockets disproportionately. There are good precedents for believing that bread being cast on the waters does produce a return after many days. I have no hesitation in supporting my noble friend's amendment.

Lord Bates: My Lords, I support the amendment in two particular regards, and I seek some clarification. The points that have been made have been perfectly presented by my noble friends Lord Jenkin of Roding and Lord Brooke of Sutton Mandeville, and I have two points to add. I draw on similar experiences under the previous Conservative Government, in which I had the joy of occupying the position of Paymaster General in looking after such matters, albeit temporarily in the final days of that Administration.
	To a degree, I can buy the careful wording used in this letter on the point of not wanting to bind or have the issue of precedent before us. However, the final sentence of the fourth paragraph states:
	"Therefore whilst I am advised that it is impossible to give a definitive answer in general terms rather than on a case by case basis, it remains unlikely that a voluntary contribution would be tax deductible".
	In many ways, that is the issue. I could understand if the sentence finished at "on a case by case basis". One could accept that as a reasonable response from the Treasury. However, to add,
	"it remains unlikely that a voluntary contribution would be tax deductible"
	seems to bind the hands in a way it sought to avoid. Once the City of London comes to realise, particularly those businesses which have offered a total of £150 million, that this sum will not be tax deductible, the consequence will be that it acts as a huge disincentive for future schemes that may be offered elsewhere in the country and for those who may still be considering a voluntary contribution to Crossrail. The issue needs to be dealt with. We are familiar with this kind of test in standard wording such as "wholly and exclusively in pursuit of the interests of the business". If the contribution was not wholly in the interests of the business, why on earth would it be made in the first place? It is bizarre to argue that a business might give 100 per cent for the sake of getting relief on 20 per cent. That is a non sequitur.
	Of course such contributions are made wholly in pursuit of the interests of business; that is why organisations make such investments. It is also the reason why this letter, albeit that it has been guided by the hand of the Treasury, is entirely wrong to suggest that such matters should be judged on a case by case basis. In the case of contributions made to Crossrail, the answer should most certainly be that they are tax deductible because they are expenses incurred wholly in pursuit of the interests of the business.

Baroness Hamwee: My Lords, I congratulate the noble Lord, Lord Jenkin, on pursuing this matter with such doggedness. In response to the last point made by the noble Lord, Lord Bates, I would have thought that if a contribution is not in the interests of a business, it is likely to be ultra vires and the directors in the case of a company would be acting in breach of their fiduciary duties.
	I have one question for the noble Lord, Lord Davies. Will it be possible or practicable—I am particularly concerned about "possible"—for the local authority to assess the impact on contributions when dealing with a variety of taxpayers? Within the drafting of the provision and the requirements of the prospectus, is it possible to assess the likely impact when the position may vary between different taxpayers?

Lord Davies of Oldham: My Lords, I congratulate the noble Lord, Lord Jenkin, on his persistence with regard to this important issue. I vouchsafe the opinion that had he received this letter a little earlier—the apologies are heartfelt; he will recognise that my noble friend had limited powers over its construction and therefore over it arriving when it did—I venture to consider that had he received it 24 or 48 hours in advance, it would not in any way, shape or form have caused him to deviate from his chosen course of tabling this amendment, because it is such an important issue.

Lord Jenkin of Roding: My Lords, I rise to say only that I might have put down a different amendment. All I am doing at the moment is trying to pursue the argument.

Lord Davies of Oldham: That I understand, my Lords. The Government are going to have to address themselves to the issue irrespective of the timing of the letter. However, there is a sincere apology on that front which my noble friend wishes me to convey. It would have helped if the issues had been made clear earlier.
	Crossrail is an important dimension of the Bill, but it is not the Crossrail Bill. We are constructing legislation for schemes in which local authorities will be in partnership with business for the economic development of areas, and Crossrail is a striking illustration of that. Noble Lords opposite have suggested that Crossrail in London should be the sole purport of the Bill, but it is not. Therefore it will not do to suggest that the Government's response to the issues raised in the Bill should be constructed solely in terms of Crossrail. As a consequence, in defence of the HMRC, the response in the letter quite properly talks about a wider generality than the specifics of Crossrail.
	I have listened very carefully to the case presented by the noble Lord, Lord Jenkin, which was ably supported by the noble Lord, Lord Brooke, who has a keen interest in this matter, and I recognise what the noble Lord, Lord Bates, offered in the way of support from the Front Bench. Of course the issue will be pursued and examined further. The letter is constructed against the generality; noble Lords have emphasised specifics. I cannot at this stage go any further than I have with regard to the letter, which makes it absolutely clear that I can offer no comfort in relation to the deductibility of voluntary contributions in a general sense but that the Inland Revenue will consider the issues on a case-by-case basis.
	Noble Lords are saying that the case-by-case basis is particularly strong in relation to Crossrail and ought to commend itself to the Government. They have argued that point strongly today and I understand the strength of the argument. But they will respect that I am defending a Bill which concerns not only the issue of Crossrail but has a general import.

Lord Brooke of Sutton Mandeville: My Lords, the Minister will be the first to take the point that for a Bill which is intended to be of benefit to the nation as a whole, as was confirmed by the vote which we had earlier, the arguments for pursuing this particular method would be dramatically enhanced if Crossrail is a success, and will be damaged if it is not.

Lord Davies of Oldham: My Lords, that is certainly so. However, there is a wider public interest in the benefits contained in the Bill which may derive from Crossrail's success because, as an economic project in itself, it is vital to the capital city. We all recognise the necessity for the success of Crossrail.
	I shall take away from the debate the importance of the representations that have been made. The noble Lord, Lord Jenkin, has indicated that it is unlikely that we have heard the last of his representations in regard to this issue. But he will accept that today I am briefed in relation to the general consideration of the Bill and that that is why I am in no position to do anything more than identify the key elements which HMRC has put forward in its letter about how it will consider these issues. It might be that progress can be made regarding Crossrail, but I emphasise that the Bill is designed to cover wider issues. Therefore, it is bound to express itself in generalities that are bound to be reflected in the kind of response that HMRC puts forward. When it talks of a case-by-case basis, that is how the matters are likely to be advanced. The Bill, however, is bound to come into the category of generalities and the issue of it being case by case must be fought on those individual aspects. There may be a framework in which that can be achieved, but the Bill does not provide that opportunity.
	I venture that noble Lords will also appreciate that, on a matter of such importance regarding taxation, there are real issues with how the other place will take the perspective that this noble House might adopt. The noble Lords who spoke in this debate are so experienced on these matters that I do not need to develop that point, but the debate has been constructive and interesting. It is clear that these issues need to be thought about deeply, and that the Revenue was obliged to respond in the context of its general position. Those generalities are bound to obtain with legislation where neither I nor my noble friend Lady Andrews—nor anybody else—can translate the Bill into one specific case in those terms. I hope that noble Lords will appreciate the limitations I have in responding constructively.

Lord Bates: My Lords, on the generalities, my point about contribution was that it was certainly not general. The final sentence of paragraph 4 of the letter dated June 5 says,
	"it remains unlikely that a voluntary contribution would be tax deductible".
	That is very specific, not general.

Lord Davies of Oldham: My Lords, it is general in the sense that it applies to all the issues that the Bill raises. The noble Lords, Lord Jenkin and Lord Brooke, were saying—and I think that the Front Bench supported them—that there was a special position regarding Crossrail. It may well be that it is in the interests of the Government, of the nation and, certainly, of London, that the Crossrail project should be advanced by this special consideration. However, when defending legislation that is, by definition, wider than Crossrail and seeks to cover a range of possibilities, it is unreasonable for me to be asked to do more than indicate that this is the general position that we are bound to defend at this point. I regret that I can go no further this evening.

Lord Jenkin of Roding: My Lords, I am extremely grateful for the support that I have had for this amendment from all parts of the House, except of course from the Government Front Bench. I start, at once, by being most grateful for the apology that the noble Lord, Lord Davies of Oldham, gave; I realise that Ministers may, in the past few days, have had other things on their minds than following up points from Committee.
	However, the issue remains: the word "unlikely" has caused a good deal of unhappiness in the House. It is good that the Minister has said that the issue will be pursued and examined further. I wonder whether, in the course of that examination, he or whoever it would be might receive a deputation from the City of London—accompanied, perhaps, by some companies that have been asked to make and have considered making voluntary contributions to Crossrail—so that this could be discussed not only with Ministers in the DCLG but, perhaps, with officials from the Revenue. That would be a helpful way forward, and it might help the Minister to achieve the objective that I think he is anxious to achieve, without prejudicing the generality of the fiscal treatment of companies in these circumstances. I am happy to give way if the Minister says that he would be prepared to do that.

Lord Davies of Oldham: My Lords, as ever, the noble Lord puts these issues in persuasive terms. He will appreciate that, given the particular position that I occupy today in coming late to the Bill, I am reluctant to engage in a response that puts obligations on others rather than on myself. I recognise the strengths of the points that have been made today, though, and there is no doubt that further discussions would be valuable. I will do what I can to facilitate those.

Lord Jenkin of Roding: My Lords, I realise the constraints that the Minister feels himself under, and no doubt if I were in his boots I would have said much the same. I have some sympathy for him, being confronted immediately by three former Treasury Ministers arguing this point. He has been good enough to say that this matter will be pursued, and I am sure that if a request is made, a delegation will be received and these good things can be discussed with those who are directly concerned. Given that, I beg leave to withdraw the amendment.
	Amendment 16 withdrawn.
	Amendment 16A
	 Moved by Lord Bates
	16A: Schedule 1, page 21, line 27, at end insert—
	"( ) A description of the arrangements for—
	(a) the proposed project management,
	(b) the governance and management arrangements (if any dedicated arrangements) for the project when completed,
	(c) the mechanisms by which those paying BRS shall be kept informed of what monies have been raised in pursuance of the BRS and how they have been expended, and
	(d) those paying BRS to be represented upon the governing body of any organisation set up for the purposes of delivering the objectives of the BRS, or, if such an organisation is not to be set up, how such persons are to be involved in the oversight of the delivery of such objectives."

Lord Bates: My Lords, I beg to move the amendment to which I have already spoken, and I wish to test the opinion of the House.

Division on Amendment 16A
	Contents 41; Not-Contents 69.
	Amendment 16A disagreed.

Amendments 17 and 18 not moved.
	Amendment 19 withdrawn.
	Amendments 20 and 21
	 Moved by Baroness Hamwee
	20: Schedule 1, page 22, line 35, leave out from "to" to end of line 37 and insert "the requirement under section 7 to hold a ballot"
	21: Schedule 1, page 22, line 38, leave out from "to" to end of line 41 and insert "the result of the ballot held under section 7"
	Amendments 20 and 21 agreed.
	Clause 6 : Consultation
	Amendment 22
	 Moved by Baroness Hamwee
	22: Clause 6, page 4, leave out lines 24 to 26 and insert "consult those persons who the authority thinks might become liable to pay a chargeable amount before the end of the chargeable period of the BRS and whom it would be appropriate to consult"

Baroness Hamwee: My Lords, I shall also speak to Amendments 23 and 24. Amendment 22 revisits Clause 6(5), because I believe consultation is important and Clause 6(5) does not in my reading actually require it. It says that,
	"a levying authority must ... think whether it would be appropriate to consult persons who the authority thinks might become liable";
	in other words, it must think whether consultation would be appropriate. At Grand Committee, the debate turned on the difficulty of identifying those who may be above or below the threshold—in other words, who might become liable—which was not the point of the amendment. Thinking whether it is appropriate to consult is not the same as thinking who might become liable. Our amendment—this is the crucial point—applies the term "appropriate" to ratepayers, whom it would be appropriate to consult, not to consultation. The consultation itself would be required. I hope that that explanation is clearer than we managed to achieve at the last stage.
	Amendment 23 would require the levying authority to publish the result of the consultation, once it had been conducted. Oddly, this is where even the best local authorities slip up too often. My noble friend Lord Tope, who has had to go back to Sutton, as he says, to be a councillor, has volunteered that this is too often a problem. The best consultation can be carried out to really high standards, but the authority forgets to feed back the outcome of that consultation—the results of it.
	Amendment 24 would flesh out Clause 6(6). The Minister may tell me that this is a detail too far but I think that it is important that when a revised version of the prospectus is published, the revisions are clearly indicated. I am thinking here of the mechanisms so readily available to us in computer programs that indicate the alterations which have been made. It will not be helpful with a complicated document to issue a revision without pointing ratepayers to where those revisions have been made. I beg to move.

Lord Bates: My Lords, I support this group of amendments as they seem to make an awful lot of sense. We had a very good debate on this issue in Committee. Clause 6 currently provides that the authority has only to think whether it might be appropriate to consult. That seems an odd thing to include in a Bill. The consequence is essentially that the levying authority must consult those whom it thinks might be liable for the BRS before the end of the chargeable period of the business rate supplement., This amendment is almost consequential on our acceptance of Amendment 1, as there will be a mandatory ballot and they will be consulted at some stage. However, that is a wider consultation than the one being aimed at here.
	Amendment 23 is consequential on that. It states:
	"The levying authority shall publish the result of the consultation".
	An additional point here is the timely publication of the results of consultations with busy business people. In Committee we discussed whether there were more immediate, real-time ways of engaging in consultation so that members of the business community could track what people said. We also discussed such exciting activities as blogging which could be used to give the business community a more immediate sense of what other members of the business community were thinking about an issue, rather than having an extensive written consultation and then finding that businesses do not have the time to read or digest results stretching to several hundred pages.
	Amendment 24 currently provides that the levying authority has only to publish a revised version of the initial prospectus if changes are made after the consultation and it believes that it would be necessary and appropriate to do so. We therefore strongly support this amendment which provides that the authorities must publish a revised version of the initial prospectus. It is almost unthinkable that there could be circumstances in which consultation took place on complex schemes aimed at economic regeneration and feedback was received but then not one change at all was made to the prospectus. Therefore there ought to be an updated prospectus. The concept of a Green Paper moving to a White Paper is sound and ought to apply to the way in which these prospectuses are issued. The prospectus should perhaps be issued in draft Green Paper form and then in a final document to be published when the results have been collated and sorted. Our view is that the amendments would be nice to have in ordinary circumstances, but, given the decision of the House on Amendment 1, they are now essential. I very much support the amendments.

Lord Davies of Oldham: My Lords, I am grateful to both noble Lords for their constructive approach to these issues. Of course local businesses should have confidence that they will be consulted if they are likely to have to pay the supplement. That is why Clause 6 requires levying authorities to consider whether they should consult those persons that they think will become liable for the BRS in future.
	The discretion allowed for in Clause 6 is not a get-out-of-jail-free card when it comes to consulting those who might become liable for the supplement. The levying authority will have to be able to justify any decision it takes not to consult those who might become liable for the supplement. For example, where properties with a rateable value of £50,000 are liable, it would be very difficult for the authority not to consult ratepayers whose properties had a rateable value of £49,999.
	The Bill as drafted gives flexibility for dealing with marginal situations—for example, determining whether it is necessary to consult those with a rateable value of £30,000 in an area where the BRS might be relatively short-term, and therefore it would be highly unlikely that such businesses would move into the category in such a short time. It enables the levying authority to take a reasonable and proportionate approach to consulting those who might become liable for the supplement. However, the amendment, by requiring authorities to consult those who might become liable for the supplement in future, runs the risk that they will have to consult absolutely anyone who has the remotest possibility of becoming liable for the supplement, lest they open themselves to a potential legal challenge. I am sure that that is not the intent of the amendment, but that is what the local authority is likely to feel obliged to do if the amendment is carried and we do not have the flexibility that we envisage in the Bill as it is presented.
	Amendment 23 requires levying authorities to publish the results of consultation on their initial prospectuses. Amendment 24 would require levying authorities to publish a revised initial prospectus following the consultation but before the publication of the final prospectus. Of course any consultation process on the BRS needs to be transparent, and businesses need to have confidence that their concerns and comments will be taken seriously and will be reflected in the final plans for the project. For these reasons, levying authorities will be required to publish a final prospectus. This will set out how the BRS will work and the details of the project, taking account of the comments and views expressed during the consultation. In line with best practice, the authority should also consider publishing a summary of the consultation responses, setting out how the project has changed as a result.
	I emphasise best practice. We are certainly prepared to emphasise in guidance what we expect to see in best practice and levying authorities should follow that. However, to require a revised initial prospectus in all cases surely goes further than what will be needed in many cases, resulting in unnecessary delay and excessive bureaucracy. Instead of taking a standardised approach, which in many cases may not be appropriate, we should give levying authorities the flexibility to decide what is right for their area and for their proposal. That is the basis of the Bill as it stands.
	I am grateful to the noble Baroness for having identified issues that need serious consideration. I know that they reflect discussions held in Committee. I merely wish to emphasise that we considered these matters in drafting the Bill. We are seeking to avoid being overly prescriptive where we do not need to be, but we certainly agree—as has been emphasised this evening—that best practice on consultation needs to be followed. We are happy to signal in guidance that levying authorities should indeed refer to existing best practice. I hope that on that basis the noble Baroness will feel sufficiently reassured to withdraw the amendment.

Baroness Hamwee: My Lords, I am not sure whether the Minister answered Amendment 23. Perhaps it was wrapped up with Amendment 22. As regards Amendment 24, publication is really very easy. The prospectus will have to be revised if there are changes. That follows; otherwise people will not know what they are talking about. Publication is really not difficult. I am so tempted to divide the House but I shall not do so despite a noble Lord saying "Go on".
	My Amendment 22 preserves flexibility as regards the consultees. It requires consultation but retains the term "appropriate" as applied to the consultees. The clause does not say what Ministers say that it says. I completely disagree with the Minister on that. However, I shall probably do better to rely on guidance than by polarising the position and having Ministers decide not to explain in guidance that the clause means something slightly different. On that basis I surrender and beg leave to withdraw the amendment.
	Amendment 22 withdrawn.
	Amendments 23 and 24 not moved.
	Clause 7 : Holding of ballot
	Amendment 25
	 Moved by Baroness Hamwee
	25: Clause 7, page 4, line 35, leave out from "BRS" to end of line 3 on page 5
	Amendment 25 agreed.
	Clause 8 : Approval by ballot
	Amendment 26
	 Moved by Baroness Hamwee
	26: Clause 8, page 5, line 14, leave out from beginning to second "the"
	Amendment 26 agreed.
	Clause 10 : Variations
	Amendments 27 and 28
	 Moved by Baroness Hamwee
	27: Clause 10, page 6, line 18, leave out from beginning to second "a" in line 19
	28: Clause 10, page 7, line 5, leave out from "BRS" to end of line 18
	Amendments 27 and 28 agreed.
	Clause 14 : Chargeable amount: supplementary
	Amendment 29 not moved.
	Clause 15 : BRS relief
	Amendment 30
	 Moved by Baroness Hamwee
	30: Clause 15, page 11, line 19, leave out from "BRS" to end of line 20 and insert "shall apply in relation to BRS reliefs that are no less favourable to ratepayers than the most favourable reliefs applied by the relevant billing or levying authorities"

Baroness Hamwee: This brief speech on my part might require a rather longer answer. On reading Hansard, I realised that I am very unclear—I may be alone in that—about the position regarding empty properties. I agreed with the noble Baroness, Lady Andrews, that I would table this amendment in order to give the Government an opportunity to explain what the position is. I beg to move.

Lord Bates: My Lords, I support the amendment. It concerns reliefs, which can apply widely. They can apply to sports clubs and other such organisations. However, the noble Baroness is seeking clarification regarding empty property rates. This issue is a sore point for business. The concept of empty property rates was introduced when businesses and the economy were doing well but has been implemented when businesses are doing badly. The idea was originally conceived to dissuade property owners from sitting on properties that should be redeveloped. Now many businesses and landlords are certainly not sitting on properties waiting to be redeveloped as their tenants are going out of business at an alarming rate. As a result, business premises are empty when their owners would wish for anything other than that, and they still have to pay this iniquitous tax of empty property rates. We will listen carefully to the Minister's response on how he will deal with reliefs.

Lord Davies of Oldham: My Lords, I am grateful to noble Lords for keeping their contributions brief because my response is somewhat lengthy, given the complexity of the issue and the importance of getting on the record exactly how the provisions on reliefs are intended to operate. I hope that the House will be tolerant of me. There are different strands to this issue and I will deal with them under three main headings. First, there is how Clause 13 is intended to work. Secondly, there is the intention behind Clause 15, entitled "BRS relief". Thirdly, I will deal with the issue of empty properties, which both noble Lords raised and the noble Lord, Lord Bates, emphasised.
	Clause 13 sets out the method for calculating the BRS liability for a ratepayer. The method varies depending on whether the ratepayer already receives one of the existing mandatory or discretionary reliefs from national non-domestic rates. In framing our proposals for BRS, we want to apply the same approach as currently operates in the non-domestic rating system. The effect of Clause 13 is that if a ratepayer receives relief on their rates bill, the same level of relief will be applied when assessing liability for BRS. I emphasise how Clause 13 works. For instance, charities that receive just the 80 per cent mandatory relief will therefore have an 80 per cent reduction in their BRS liability. Where a charity receives 80 per cent mandatory relief and a further 20 per cent top-up relief on its rates bill, it will be entitled to the full 100 per cent relief and will pay nothing.
	I realise that Clause 15 on BRS relief may have given rise to some confusion and I will attempt to explain how this clause differs from Clause 13. Clause 13 deals with reliefs under the existing non-domestic rating system. By contrast, Clause 15 covers reliefs specific to BRS. It enables levying authorities to reduce the impact of BRS, not by reference to any reliefs payable under the non-domestic rates system, but by setting out its rules for levying BRS. We make clear that those properties with a rateable value below £50,000 will not be liable for BRS. Clause 15 enables levying authorities to set the threshold for liability above £50,000—say at £65,000—so that properties with a rateable value below this would not be liable for BRS. It would be up to the discretion of the levying authority. Alternatively, levying authorities may wish to use Clause 15 to set a differential rate for properties with different rateable values. An example would be a levy of 0.5p for properties with a rateable value of between £50,001 and £70,000, a 1p levy for properties with a rateable value of between £70,001 and £85,000, and a 2p levy for properties with rateable values above that. That is the import of Clause 15.
	Finally, I turn to empty properties. The starting point is how the non-domestic rate system works in relation to empty properties. Owners of empty properties are liable for 100 per cent of business rates liability unless they are specifically exempted. The exemptions are set out in regulations made by the Secretary of State. These include, for example, listed buildings. In such cases, those ratepayers have no liability for non-domestic rates. Levying authorities can choose whether their BRS should apply to empty properties. If they choose to do so, the same rules apply to the application of BRS liability as to non-domestic rate liability. That means that empty properties that are exempt from liability for NDR will also not be liable for BRS.
	However, for empty properties liable to 100 per cent NDR, those of more than £50,000 rateable value will have 100 per cent liability for BRS. So, if a levying authority levies the maximum 2p BRS for occupied as well as empty properties, those empty properties with a rateable value of more than £50,000 will be subject to the same 2p levy. If a levying authority chooses to include empty properties in their BRS, any reliefs it may wish to apply—that is, the reliefs under Clause 15 —must apply equally to occupied and empty properties. For example, if a levying authority wishes to increase the threshold for BRS liability to £60,000, this would apply to occupied and empty properties. The levying authority could not apply different rules to empty properties. It could not, for example, set a threshold of £55,000 rateable value for occupied properties and set a different threshold of, for example, £60,000 for empty properties. That is not permissible.
	It would be worth spending a brief moment to explain the role of Clause 13(6). This prescribes the formula for calculating the daily chargeable amount for empty properties. But this subsection applies only where the Secretary of State or, in Wales, the Welsh Ministers, have made an order under Section 45(4A) of the Local Government Finance Act 1988, which reduces the liability to national non-domestic rates of the owners of empty properties to less than 100 per cent of the basic liability. If such an order had been made under that Act, reducing NDR liability for empty properties to, say, 50 per cent, I assure the House that liability for BRS would mirror this. Liability for BRS would also be at 50 per cent. However, no such order under the 1988 Act has ever been made, so the subsection has no effect at this stage.
	I am sure that the noble Baroness, Lady Hamwee, was all too well aware of that issue, but I put that on the record for those who know a little less about these issues than she does. I realise that I have gone much wider than the focus of the specific amendment, but the noble Baroness invited me to clarify the issue. I hope that that helps the House.

Baroness Hamwee: My Lords, that was admirable. I hope that the noble Lord did not have to spend more than about five hours on that over the weekend. Seriously, that was extremely helpful. I am sure that I will understand it even better when I have read it, but after that final point about the order under the 1988 Act, as amended, not having been made, suddenly everything slots into place. I beg leave to withdraw the amendment.
	Amendment 30 withdrawn.
	Clause 16 : Interaction with BID levy
	Amendment 31
	 Moved by Lord Bates
	31: Clause 16, page 11, line 37, leave out subsection (1) and insert—
	"(1) Where a person is, by reference to a hereditament, liable for BID levy in respect of all or part of a financial year in respect of which the person is, in relation to that hereditament, subject to a BRS imposed by the authority, the chargeable amount payable in relation to the BRS shall be offset in accordance with subsection (2)."

Lord Bates: My Lords, the amendment stands in my name and that of my noble friend Lord Cathcart. The amendments in this group have been retabled for the good reason that we were not satisfied with the answer that we received in Committee. Therefore, we sought to revisit the amendments on Report.
	First, I shall briefly run through what we propose. Amendment 31 means that where a person is liable for a business improvement district, or BID, levy, and is subject to a business rate supplement imposed by that authority, the chargeable amount payable in reference to the business rate supplement will be offset, as stated in subsection (2). Amendment 32 follows on from that and would leave out,
	"to the extent specified in the rules".
	Amendment 33 would leave out subsection (4), which states how the rules must be made.
	As the Bill stands, the levying authority is enabled to make rules on what to do when a person is liable for the business improvement district levy and is also subject to the business rate supplement. Our amendments remove the levying authority's right to make rules about it and instead specify that the liability for business improvement districts will be offset against the amount that the person would pay for business rate supplement.
	Amendment 35 would mean that this section does not apply to Crossrail for the reasons which we touched on earlier. The first tranche of amendments deals with offsetting the bid levy. This was debated in another place in Committee on 27 January at cols. 181 to 186 of Hansard. We do not want to risk harming business improvement district schemes, which by and large seem to be working well around the country. We have received a number of representations from business improvement districts, including the West End Company and many others, where they seem to be doing excellent work. We want to support that initiative.
	We are none the less cognizant of the huge pressure being put on businesses at the moment. This is an issue to which we return time and time again. It is a question of good legislation being a matter of timing. There could not be a worse time for levying further charges on business, particularly where a business has willingly and voluntarily engaged in a business improvement district and then finds that, in addition to the contributions it is making at that level, which in reference to Amendment 16 may or may not be tax deductible, it could potentially be faced with a business rate supplement of up to 2p in the pound. That is on top of the business rates which are already levied, currently at a rate of about 48p in the pound. These are substantial sums of money and effectively take business rates to 50p in the pound on rateable value, which is a significant sum.
	Although I do not want to run foul of tolerance in terms of procedure, I refer to the previous debate as an example. Take an empty property which has a rateable value in excess of £50,000—a property which has been declared empty because the business has gone bankrupt. If the property has to potentially stump up £25,000 a year, notwithstanding that the owner is not getting any rent, that seems to be unsympathetic and unhelpful to business, in contrast to what the Government tells us that they are trying to do.
	In many ways, the concern that levying authorities will raise the business rate supplement by a low enough threshold so that the ballot will not be triggered has been eased, providing that, when the amendment and the Bill make their way back down the corridor, those important amendments and the express will of this House are honoured in another place.
	Because businesses are under so much pressure at the moment and are not able to vote against business rate supplements, they will be forced to vote against business improvement districts. This is in addition to—this was a fair point raised by my noble friend Lord Jenkin of Roding—the community improvement levy, which has not been exercised and which they do not have a vote for.
	The best way to prevent this situation is to allow an automatic offset of bid levies. This is necessary reassurance to business so that they will not be hit be a double or potentially even a triple whammy at a very difficult time. Our Amendment 35 makes sure that Crossrail is exempt. For the reasons we have given, we have always taken the view that Crossrail is an exceptional case. We have acknowledged that; we are supportive of it and our argument throughout has been that we should not turn something exceptional into something normative.
	On business improvement districts, the Bill allows a levying authority to decide whether to offset the payment of BID levies against the business rate supplement liability, provided that the approach is consistent with all BIDs in the area. In London, the mayor does not intend to exempt BIDs from paying Crossrail a business rate supplement for the reasons that I shall set out. I want to spend a moment dealing with this because, for those observing the amendments, there may appear to be a slight inconsistency here. In the case of Crossrail, we are supporting the fact that there is no offset because, if there were, a strong incentive would be created to establish business improvement districts for the sole purpose of avoiding the business rate supplement, and we would be concerned about that.
	Business improvement districts contribute towards local improvements such as street cleaning, security and public area improvements. They are unrelated items of expenditure and, in our opinion, it would be a mistake to offset funding for one against the other. Another reason is that many voluntary associations which are not formally set up as business improvement districts will have to pay the Crossrail business rate supplement. Without the revenue from businesses in business improvement districts, Crossrail would have a funding shortfall, particularly as large parts of the West End, including Oxford Street and Regent Street, which are likely to be among the biggest beneficiaries of Crossrail, would not be required to pay the Crossrail business rate supplement. I make that point simply in the hope of heading off any charge that the amendments do not quite square up to our position.
	For those reasons, the mayor opposes offsetting the payment of business improvement district levies against the Crossrail business rate supplement liability. However, he will work with the boroughs and the business community to ensure that the impact of the Crossrail business rate supplement is minimised.
	Business improvement districts, the British Property Federation, London First and other organisations have long argued that BIDs should have the power to decide whether to include property owners in business improvement districts, subject to this being approved by a ballot. They are currently exempt from paying any BID levy, although many property owners have contributed voluntarily to BIDs. However, some of the uncertainty now surrounding the tax status has been a cause for concern.
	Why are we debating this again after we covered the matter in some detail in Committee? We are grateful that the Minister has tabled government amendments, which we will reach in the next or a later group, that will allow the burden to be shared between property owners and occupiers. That should go some way towards helping to alleviate the weight of taxation on businesses, which this Bill will increase. However, we are still concerned. In Committee, the Minister could tell us only that an automatic offset would impose rules on local authorities rather than devolve responsibility to them. She quoted the example of the South Bank Employers Group, which said:
	"The fact that businesses have chosen to contribute to this fund of local additionality ... should not in any way relieve them of the obligation to contribute to a major pan-London project like Crossrail".
	It seems to us that the Government must admit that our amendments achieve just what the Minister was seeking to achieve and which she articulated in Committee. She also said that the chief executive of British BIDs, Dr Julie Grail, had said that,
	"a full offset in London would be a ridiculous and dangerous move".—[Official Report, 18/5/09; col. GC 553.]
	Again, our amendments show that we are very much listening to what the business community and business improvement districts want. The Minister then argued that the crucial point is that the levying authorities can use their discretion on whether or not to have an offset. We would argue on the side of businesses, the crucial point being that they should not be hit by two levels of taxation. The Minister knows that we disagree with the Bill on a point of principle, but our amendments at least try to make sure that businesses are protected in some way. I beg to move.

Baroness Hamwee: My Lords, I wrote a note to myself to refer to the Mayor of London's briefing. I will not read it out because the noble Lord, Lord Bates, has done it full justice. We are, however, opposed to an automatic offset. BIDs are different from BRSs—they have a different purpose and there are different ratepayers—so we do not think it would be appropriate for there to be an offset in the automatic way he suggests. I am afraid, therefore, that we cannot support this amendment.

Lord Davies of Oldham: My Lords, at this stage in the evening, one takes solace where one can, and I take a great deal of solace from the noble Baroness, Lady Hamwee, who, in very succinct terms, has indicated why she cannot support the amendments, and, of course, neither can I. I will deal with Amendment 35 separately.
	The interaction between business improvement districts and BRSs has generated a fair degree debate and passion, both in this House and in the other place. I do not for one moment underestimate the concerns that have been raised on this issue and I understand the force with which the noble Lord presented his amendments and the articulate way in which he sought to advance them. However, we do not think that having an automatic offset is the right way forward. It is worth taking a step back and thinking about what we are trying to deliver here.
	This Bill provides a real opportunity for local authorities to work together with businesses to develop proposals that will enhance the economic development of local areas. This is not about diktats from Whitehall; it is about devolving responsibility to the local level. It will be for the local authorities, working in partnership with businesses in their area, to put forward proposals in their prospectus. Provided local authorities can make the link to economic development, we want them to use this new power flexibly to meet the specific needs of their area. We have set an overall limit of 2p but we are giving authorities the flexibility to decide whether the levy should be set at 0.5p, 1p, or 2p. They can decide whether to offer more generous safeguards to businesses. They can, if they wish, choose to set the threshold for liability above £50,000—for instance, at £65,000. They can decide to exclude or include empty properties in their BRS proposals.
	All this represents the fact that flexibility is at the heart of the Bill. It would be totally inconsistent to impose a requirement on levying authorities to have an automatic offset for those paying BID levies. It would be equally illogical for the automatic offset to apply in every case except for the Crossrail project. I heard what the noble Lord had to say about his Amendment 35, but the Bill is clear that it should be left to the Mayor to decide whether to have an offset. Surely that is the simplest and most consistent way of going about it. I understand the arguments for an automatic offset, but the noble Lord will recognise from the debates I have outlined here and elsewhere that he does not command a universal view. We have heard from those in the BID sector itself who do not favour this approach. It would be unwise and irresponsible to ignore those views. The Bill is right to say that levying authorities can choose to do it, if appropriate. It is for the local authorities to make their decisions.
	The noble Lord valiantly pressed an issue which, I recognise, has a degree of support, although he suggested that, with Crossrail and the mayor, there is not that support. The other side of the case is at least as strong and our concern in the Bill is to maintain for local authorities—they will have to take the initiative, nothing is imposed on them; if they do not take initiatives, none of these projects go forward—the maximum flexibility for them to make the choice. That must be the right strategy, and I hope that the noble Lord is at least persuaded enough to withdraw his amendment.

Lord Bates: My Lords, I am pleased to say that the Minister has given fulsome consideration to my concerns and given me a good response. I certainly do not want to press the amendments, and beg leave to withdraw the amendment.
	Amendment 31 withdrawn.
	Amendments 32 and 33 not moved.

House adjourned at 10.01 pm.